Cisco Systems designs, manufactures, and sells Internet Protocol (IP) based networking products and services related to the communications and information technology industry worldwide. The company was founded in 1984 and is based in San Jose, California.
CSCO Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Cisco Systems Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Cisco Systems Inc ranked in the 47th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. The most interesting components of our discounted cash flow analysis for Cisco Systems Inc ended up being:
As a business, CSCO is generating more cash flow than 96.14% of positive cash flow stocks in the Technology.
The business' balance sheet suggests that 7% of the company's capital is sourced from debt; this is greater than merely 21.2% of the free cash flow producing stocks we're observing.
CSCO's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 3%; for context, that number is higher than 39.47% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as CSCO, try MCHP, MSI, CLGX, G, and DAVA.
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