CSCO
CISCO SYSTEMS, INC.NasdaqThree independently researched cases — bear, base, and bull — generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Valuation history every run
Market vs intrinsic value as of valuation
Compared against the researched share price for CSCO; recalculate the valuation to refresh it.
Base inputs from financials
source period →Base revenue (TTM)
$60.7B
Diluted shares
3,982,000,000
Net cash
-$15.8B
Bear
medium confidence$24.62
IV / share
-78.8% vs $115.86
Revenue growth4.0% → 2.5% → 2.0% → 2.0% → 2.0%medium
Assumes the $9B AI order surge is a one-time hyperscaler build that digests after FY26 and Cisco reverts to its long-run low-single-digit core growth, as it did after the 2011, 2019 and 2023 peaks.
Operating margin21.5%medium
Reflects mix shift toward lower-margin hyperscaler/white-box-adjacent AI hardware plus continued restructuring charges pulling GAAP margin back to the FY25 average rather than the recent 25% peak.
Tax rate21.0%medium
Assumes the favorable GAAP rate normalizes above the guided non-GAAP rate toward the US statutory level as foreign-derived income benefits and stock-comp windfalls fade.
Reinvestment rate28.0%medium
Even in a low-growth outcome Cisco must keep funding R&D-heavy silicon development and defensive M&A to hold share against Arista, Nvidia and white-box vendors, so cash conversion stays pressured.
Terminal growth1.8%high
Below long-run inflation, reflecting a mature enterprise networking franchise facing structural share loss in its terminal state.
Base
medium confidence$41.71
IV / share
-64.0% vs $115.86
Revenue growth8.5% → 7.0% → 5.5% → 4.5% → 4.0%high
Tracks sell-side consensus of high-single-digit FY27 growth as AI infrastructure revenue scales from ~$4B to ~$6B alongside a campus refresh cycle, then fades toward mid-single digits as the AI contribution laps.
Operating margin25.5%high
Holds margin near the current record GAAP level, assuming Splunk software attach and operating leverage roughly offset the dilutive gross-margin effect of hyperscaler hardware.
Tax rate19.0%high
Uses management's own guided non-GAAP rate as the sustainable cash tax burden, above the temporarily low ~15% GAAP rate.
Reinvestment rate25.0%medium
Cisco is structurally capital-light (capex well under 2% of sales) but recycles roughly a quarter of after-tax profit into R&D capitalization and acquisitions to sustain mid-single-digit growth.
Terminal growth2.5%high
Roughly matches long-run inflation, appropriate for a mature but entrenched infrastructure incumbent with recurring software revenue.
Bull
low confidence$66.50
IV / share
-42.6% vs $115.86
Revenue growth13.0% → 11.5% → 9.5% → 8.0% → 6.5%medium
Assumes AI infrastructure orders convert to revenue faster than modeled and Silicon One wins extend Cisco's hyperscaler share, sustaining the ~12% growth seen in Q3 FY26 for several more years.
Operating margin28.5%medium
Assumes the eight-quarter margin expansion continues as Splunk security/observability software and recurring subscriptions become a larger share of mix and restructuring charges roll off.
Tax rate17.0%medium
Assumes Cisco sustains a rate between its current GAAP and non-GAAP guidance through continued IP structuring and foreign-derived intangible income benefits.
Reinvestment rate22.0%low
In the upside case incremental AI and software revenue rides on already-built silicon and platform investment, so growth is achieved with less incremental capital per dollar of sales.
Terminal growth3.2%medium
Modestly above nominal GDP but well below the risk-free rate, reflecting a permanently larger addressable market from AI networking build-outs.
Market inputs researched
The 10-year Treasury is the standard risk-free proxy and matches the duration of the forecast cash flows.
Cisco's stock has tracked the broad market closely, consistent with a diversified large-cap infrastructure franchise despite its recent AI-driven re-rating.
Uses the forward-looking implied S&P 500 premium rather than a historical average, consistent with current index levels and rates.
Most recent available close, against a 52-week high of $130.37 and an average analyst price target near $127.
Generated 8/5/2026, 2:25:31 PM · pipeline v1.0.0