NASDAQ · Technology

Cisco Systems, Inc.

CSCO · Communication Equipment

$119.54

▲ 2.21 (1.88%)

Cached · 10 min

Overall Grade

Defensive

Enterprising

Profitability

A⤢

Gross Profit Margin 63.6%

Operating Margin 25.0%

Net Income Margin 21.3%

Fin. Health

F⤢

Years to Pay Off Debt 9.3 yrs

Working Capital vs Long-Term Debt -$22.4B

Working Capital -$3.0B

Valuation

F⤢

Margin of Safety 0.0%

Price-to-Book 9.64x

Cash Flow

A⤢

Free Cash Flow $3.3B

CapEx % of Net Income 12.3%

Owner Earnings $4.4B

Profitability

Gross Profit Margin 63.6%

Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.

Operating Margin 25.0%

Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.

Net Income Margin 21.3%

Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.

Financial Health

Years to Pay Off Debt 9.3 yrs

Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.

Working Capital vs Long-Term Debt -$22.4B

Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.

Working Capital -$3.0B

Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.

Cash Flow

Free Cash Flow $3.3B

Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.

CapEx % of Net Income 12.3%

Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.

Owner Earnings $4.4B

Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.

Defensive — Graham's strict criteria (P/B, P/E, dividends, stability) · Enterprising — Profitability & cash flow focused, accepts higher valuations for quality

About Cisco Systems, Inc.

Cisco Systems, Inc. designs, develops, and sells technologies that help to power, secure, and draw insights from the internet in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and China. The company offers data center switching; network security, identity and access management, and secure access service edge; threat intelligence, detection, and response solutions; interconnects public and private wireline and mobile networks, delivering connectivity to campus, data center, and branch networks; WEBEX suite, collaboration devices, and contact center; communication platform as a service software, including perpetual licenses, subscription arrangements, and hardware solutions; network assurance, monitoring and analytics, and observability suite; issue resolution, software support, and hardware replacement; professional services, such as planning, design, implementation, and high-value consulting; service and support packages, financing, and managed network services; and regional, national, and international wireline carriers, webscale products, internet, and cable. It also delivers connectivity to campus, data center, and branch networks; wireless products, including indoor and outdoor wireless coverage designed for seamless roaming use of voice, video, and data applications; end-to-end collaboration solutions through cloud, on-premise, or within hybrid cloud environments, transition collaboration solutions from on-premise to the cloud; and network assurance, monitoring and analytics, and observability suite. In addition, it offers technical support and advisory services. The company serves businesses, public institutions, governments, and service providers. It sells its products and services directly, through systems integrators, service providers, resellers, and distributors. Cisco Systems, Inc. was incorporated in 1984 and is headquartered in San Jose, California.

Market Data

Market Cap $471.2B

Enterprise Value $487.6B

P/E (TTM) 39.85

Dividend Yield 1.41%

Exchange NASDAQ

Key Margins

Gross Profit 63.6%

Operating Margin 25.0%

Net Margin 21.3%

Company Info

Sector Technology

Industry Communication Equipment

Employees 86200

Country United States

Visit website

📖

Full Graham Analysis

Mr. Market is currently offering Cisco Systems, Inc. at $119.54.

The business passes only 2 of 6 of Graham's defensive criteria — well below his required standard.

At $119.54, the stock trades at a 676% premium to its Graham Number of $15.40. Graham would consider this price speculative.

There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.

Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..

Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.

Showing Key Metrics

Income Highlights

Metric	Q2 2026	Q4 2025
Gross Profit %	63.6%▼	65.5%
Operating Margin %	25.0%▲	23.6%
Net Income %	21.3%▲	19.2%
Diluted EPS	0.85▲	0.72

Balance Sheet Highlights

Metric	Q2 2026	Q4 2025
Total Assets	$125.5B	$121.1B
Total Debt	$31.3B▲	$28.1B
Working Capital	-$3.0B▼	-$2.6B
Years to Pay Debt	9.28	9.82

Cash Flow Highlights

Metric	Q2 2026	Q4 2025	Q4 2024
Free Cash Flow	$3.3B▲	$2.9B•	N/A
Owner Earnings	$4.4B	$3.8B	N/A
CapEx % of Net Income	12.3%	11.3%	N/A

Income Statement

	2026	2025
Tax Effect Of Unusual Items	44,356	6,733
Tax Rate For Calcs	0	0
Normalized EBITDA	4,784,000	4,304,000
Total Unusual Items	269,000	43,000
Total Unusual Items Excluding Goodwill	269,000	43,000
Net Income From Continuing Operation Net Minority Interest	3,373,000	2,860,000
Reconciled Depreciation	637,000	606,000
Reconciled Cost Of Revenue	5,352,000	4,763,000
EBITDA	5,053,000	4,347,000
EBIT	4,416,000	3,741,000
Net Interest Income	-163,000	-128,000
Interest Expense	377,000	350,000
Interest Income	214,000	222,000
Normalized Income	3,148,356	2,823,733
Net Income From Continuing And Discontinued Operation	3,373,000	2,860,000
Total Expenses	11,882,000	11,373,000
Total Operating Income As Reported	3,960,000	3,363,000
Diluted Average Shares	3,982,000	3,993,000
Basic Average Shares	3,952,000	3,956,000
Diluted EPS	0	0
Basic EPS	0	0
Diluted NI Availto Com Stockholders	3,373,000	2,860,000
Net Income Common Stockholders	3,373,000	2,860,000
Net Income	3,373,000	2,860,000
Net Income Including Noncontrolling Interests	3,373,000	2,860,000
Net Income Continuous Operations	3,373,000	2,860,000
Tax Provision	666,000	531,000
Pretax Income	4,039,000	3,391,000
Other Income Expense	243,000	9,000
Other Non Operating Income Expenses	-26,000	-34,000
Special Income Charges	1,000	-147,000
Restructuring And Mergern Acquisition	-1,000	147,000
Gain On Sale Of Security	268,000	190,000
Net Non Operating Interest Income Expense	-163,000	-128,000
Interest Expense Non Operating	377,000	350,000
Interest Income Non Operating	214,000	222,000
Operating Income	3,959,000	3,510,000
Operating Expense	6,121,000	6,235,000
Depreciation Amortization Depletion Income Statement	228,000	231,000
Depreciation And Amortization In Income Statement	228,000	231,000
Amortization	228,000	231,000
Amortization Of Intangibles Income Statement	228,000	231,000
Research And Development	2,377,000	2,400,000
Selling General And Administration	3,516,000	3,604,000
Selling And Marketing Expense	2,855,000	2,871,000
General And Administrative Expense	661,000	733,000
Other Gand A	661,000	733,000
Gross Profit	10,080,000	9,745,000
Cost Of Revenue	5,761,000	5,138,000
Total Revenue	15,841,000	14,883,000
Operating Revenue	15,841,000	14,883,000

Balance Sheet

	2026	2025
Ordinary Shares Number	3,940,000	3,938,000
Share Issued	3,940,000	3,938,000
Net Debt	24,220,000	19,689,000
Total Debt	31,303,000	28,089,000
Tangible Book Value	-18,281,000	-20,959,000
Invested Capital	80,164,000	74,962,000
Working Capital	-2,982,000	-2,575,000
Net Tangible Assets	-18,281,000	-20,959,000
Common Stock Equity	48,861,000	46,873,000
Total Capitalization	68,232,000	68,237,000
Total Equity Gross Minority Interest	48,861,000	46,873,000
Stockholders Equity	48,861,000	46,873,000
Gains Losses Not Affecting Retained Earnings	-793,000	-930,000
Other Equity Adjustments	-793,000	-930,000
Retained Earnings	704,000	-364,000
Capital Stock	48,950,000	48,167,000
Common Stock	48,950,000	48,167,000
Total Liabilities Net Minority Interest	76,685,000	74,229,000
Total Non Current Liabilities Net Minority Interest	37,144,000	38,778,000
Other Non Current Liabilities	3,316,000	3,074,000
Tradeand Other Payables Non Current	2,304,000	2,172,000
Non Current Deferred Liabilities	12,153,000	12,168,000
Non Current Deferred Revenue	12,153,000	12,168,000
Long Term Debt And Capital Lease Obligation	19,371,000	21,364,000
Long Term Debt	19,371,000	21,364,000
Current Liabilities	39,541,000	35,451,000
Other Current Liabilities	4,730,000	4,972,000
Current Deferred Liabilities	16,446,000	15,801,000
Current Deferred Revenue	16,446,000	15,801,000
Current Debt And Capital Lease Obligation	11,932,000	6,725,000
Current Debt	11,932,000	6,725,000
Other Current Borrowings	3,498,000	3,249,000
Commercial Paper	8,434,000	3,476,000
Pensionand Other Post Retirement Benefit Plans Current	3,290,000	3,064,000
Payables And Accrued Expenses	3,143,000	4,889,000
Payables	3,143,000	4,889,000
Total Tax Payable	173,000	2,471,000
Income Tax Payable	173,000	2,471,000
Accounts Payable	2,970,000	2,418,000
Total Assets	125,546,000	121,102,000
Total Non Current Assets	88,987,000	88,226,000
Other Non Current Assets	8,068,000	7,113,000
Non Current Deferred Assets	7,558,000	7,314,000
Non Current Deferred Taxes Assets	7,558,000	7,314,000
Non Current Note Receivables	3,124,000	3,075,000
Non Current Accounts Receivable	518,000	644,000
Goodwill And Other Intangible Assets	67,142,000	67,832,000
Other Intangible Assets	7,850,000	8,713,000
Goodwill	59,292,000	59,119,000
Net PPE	2,577,000	2,248,000
Accumulated Depreciation	-7,281,000	-7,413,000
Gross PPE	9,858,000	9,661,000
Other Properties	56,000	49,000
Machinery Furniture Equipment	5,670,000	5,550,000
Properties	4,132,000	4,062,000
Current Assets	36,559,000	32,876,000
Other Current Assets	5,795,000	5,833,000
Inventory	4,708,000	3,395,000
Other Inventories	7,000	5,000
Finished Goods	1,107,000	985,000
Work In Process	826,000	411,000
Raw Materials	2,768,000	1,994,000
Receivables	9,416,000	7,912,000
Other Receivables	352,000	371,000
Loans Receivable	2,584,000	2,714,000
Accounts Receivable	6,480,000	4,827,000
Allowance For Doubtful Accounts Receivable	-73,000	-62,000
Gross Accounts Receivable	6,553,000	4,889,000
Cash Cash Equivalents And Short Term Investments	16,640,000	15,736,000
Other Short Term Investments	9,557,000	7,336,000
Cash And Cash Equivalents	7,083,000	8,400,000

Cash Flow

	2026	2025	2024
Free Cash Flow	3,343,000	2,889,000
Repurchase Of Capital Stock	-2,612,000	-2,276,000
Repayment Of Debt	-4,862,000	-2,788,000
Issuance Of Debt	6,399,000	1,559,000
Issuance Of Capital Stock	0
Capital Expenditure	-414,000	-323,000
Interest Paid Supplemental Data	604,000	616,000
Income Tax Paid Supplemental Data	659,000	634,000
End Cash Position	7,083,000	8,401,000
Beginning Cash Position	7,459,000	8,910,000
Effect Of Exchange Rate Changes	-24,000	-14,000
Changes In Cash	-352,000	-495,000
Financing Cash Flow	-2,039,000	-3,863,000
Cash Flow From Continuing Financing Activities	-2,039,000	-3,863,000
Net Other Financing Charges	1,034,000	-1,000
Cash Dividends Paid	-1,660,000	-1,617,000
Common Stock Dividend Paid	-1,660,000	-1,617,000
Net Common Stock Issuance	-2,612,000	-2,276,000
Common Stock Payments	-2,612,000	-2,276,000
Common Stock Issuance	0
Net Issuance Payments Of Debt	1,199,000	31,000
Net Short Term Debt Issuance	-338,000	1,260,000
Net Long Term Debt Issuance	1,537,000	-1,229,000
Long Term Debt Payments	-4,862,000	-2,788,000
Long Term Debt Issuance	6,399,000	1,559,000
Investing Cash Flow	-2,070,000	156,000
Cash Flow From Continuing Investing Activities	-2,070,000	156,000
Net Other Investing Changes	2,000	-22,000
Net Investment Purchase And Sale	-1,658,000	508,000
Sale Of Investment	2,115,000	2,510,000
Purchase Of Investment	-3,773,000	-2,002,000
Net Business Purchase And Sale	0	-7,000
Purchase Of Business	0	-7,000
Net PPE Purchase And Sale	-414,000	-323,000
Purchase Of PPE	-414,000	-323,000
Operating Cash Flow	3,757,000	3,212,000
Cash Flow From Continuing Operating Activities	3,757,000	3,212,000
Change In Working Capital	-753,000	-1,153,000
Change In Other Working Capital	310,000	-851,000
Change In Other Current Liabilities	-530,000	-374,000
Change In Other Current Assets	40,000	-592,000
Change In Payables And Accrued Expense	-4,000	-647,000
Change In Accrued Expense	-212,000	-539,000
Change In Payable	208,000	-108,000
Change In Account Payable	208,000	-108,000
Change In Inventory	-788,000	-234,000
Change In Receivables	219,000	1,545,000
Changes In Account Receivables	133,000	1,857,000
Other Non Cash Items		-3,000	-1,000
Stock Based Compensation	914,000	1,055,000
Provisionand Write Offof Assets	2,000		-1,000
Deferred Tax	-153,000	25,000
Deferred Income Tax	-153,000	25,000
Depreciation Amortization Depletion	637,000	606,000
Depreciation And Amortization	637,000	606,000
Depreciation		606,000
Operating Gains Losses	-263,000	-178,000
Gain Loss On Sale Of Business	-263,000	-178,000
Net Income From Continuing Operations	3,373,000	2,860,000

📊 Quarterly mode — Graham Fair Value & 7 Criteria require annual data. Switch to Annual for full analysis.

Quarter vs Same Quarter Last Year

YoY strips seasonality

Revenue Growth (YoY)

Prior year: $14.1B ▲ $15.8B +12.0%

Revenue growth vs same quarter last year strips seasonality. Consistent double-digit growth is a Buffett hallmark.

Gross Margin

Prior year: 65.6% ▲ 63.6% -1.9pp

Buffett: consistent gross margin above 40% signals durable pricing power and competitive moat.

Operating Margin

Prior year: 28.0% ▲ 25.0% -3.0pp

Graham: operating margin reflects true business economics before financing. Trend matters as much as level.

Net Margin

Prior year: 17.6% ▲ 21.3% +3.7pp

Net margin can be distorted by one-time items, tax timing, or interest costs — compare to operating margin for signal quality.

Quarterly Health Checks

3 Graham/Buffett criteria that are valid and reliable on quarterly data

✅ Adequate Size

Graham required scale for resilience. Quarterly revenue × 4 gives an annualised proxy.

$15.8B/qtr (≈$63.4B ann.)

vs > $1.5B annualised revenue

❌ Financial Condition

Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.

0.92x current ratio

vs ≥ 2.0x

✅ Free Cash Flow

Buffett's most important single metric. A positive FCF quarter means the business generated real cash for owners after maintaining its asset base.

$3.3B

vs Positive

Operating Cash Flow

$3.8B

Latest quarter · Buffett's cash reality check

ROIC

3.6%

Based on latest annual operating income

Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.

Market Cap / Net Assets

9.6x

Net Assets: $48.9B

Asset Context — Communication Equipment

This company's primary assets are likely intangible (brand, IP, talent, network effects) and don't appear on the balance sheet. Net Assets may significantly understate intrinsic value. ROIC and free cash flow are more reliable indicators of business quality.

⚠️ Revenue grew vs prior year but operating margin contracted. Possible explanations: deliberate investment in growth (hiring, marketing, R&D), input cost inflation, or pricing pressure from competition. Buffett distinguishes between spending that builds moat vs. spending that doesn't.

Peers & Industry

No auto-detected peers for Communication Equipment. You can manually compare CSCO against any stock using the Compare tool.

"The management of a business is its most important single factor — more important than market position, patents, or financial structure."

— Benjamin Graham

Capital Allocation & Alignment

Insider Ownership

0.06%

Low — management has little skin in the game

Return on Equity (ROE)

6.9%

Weak — poor returns on equity

Return on Assets (ROA)

2.7%

Fair — average asset utilization

Share Buybacks (Latest Year)

$7.2B

Management is returning capital to shareholders via buybacks

Debt Trend YoY

+4.0% YoY

Debt is roughly stable

Leadership Team

Charles Robbins

Chairman & CEO

Age 59

Pay: $6,968,061

0.207% of net income

Jeetendra Patel

President & Chief Product Officer

Age 53

Pay: $2,945,368

0.087% of net income

Thimaya Subaiya

Executive Vice President of Operations

Age 46

Pay: $2,626,614

0.078% of net income

Mark Patterson

Executive VP & CFO

Age 55

Andrew Ashton

Senior Vice President of Corporate Finance

Top Institutional Holders

Institution	% Owned	Shares
Blackrock Inc.	9.26%	365,059,875
Vanguard Capital Management LLC	6.19%	243,780,205
State Street Corporation	4.91%	193,593,697
Vanguard Portfolio Management LLC	2.99%	117,849,671
Geode Capital Management, LLC	2.59%	102,134,942
Morgan Stanley	1.97%	77,731,032
FMR, LLC	1.71%	67,385,563
Capital Research Global Investors	1.62%	63,949,104

⚠️ Current ratio below 1 — liquidity risk

Risk Analysis

Beta (Market Risk)

1.00

Moderate volatility — moves slightly more than market

Short Interest

1.6% of float

Low short interest — market is not heavily bearish

Debt-to-Equity

0.68x

Conservative balance sheet — low financial risk

Current Ratio

0.93x

Weak liquidity — current liabilities exceed current assets

52-Week Price Range

Low: $65.72 Current: $119.54 High: $130.37

Currently at 83% of 52-week range

Cisco Systems, Inc.

Metric Explanations

Full Graham Analysis

Income Highlights

Balance Sheet Highlights

Cash Flow Highlights

Quarter vs Same Quarter Last Year

Quarterly Health Checks

Operating Cash Flow

ROIC

Market Cap / Net Assets

Peers & Industry

Capital Allocation & Alignment

Leadership Team

Top Institutional Holders

Risk Analysis