Cisco (CSCO) Last Update 2/15/21
Related: NOK JNPR MSI ERIC
% of Stock Price
Revenue
Gross Profits
Free Cash Flow
Cisco
STOCK PRICE
DIVISION
% of STOCK PRICE
Network Services
26.0%
$12.74
Applications
10.4%
$5.08
TOTAL
100%
$48.97
$48.97
Yours
Trefis Price
N/A
$45.55
Market
 
Top Drivers for Period
Key Drivers
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TREFIS Analysis


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RECENT NEWS AND ANALYSIS

Potential upside & downside to trefis price

Cisco Company

VALUATION HIGHLIGHTS

  1. Infrastructure Platforms constitute 49% of the Trefis price estimate for Cisco's stock.
  2. Network Services constitute 26% of the Trefis price estimate for Cisco's stock.
  3. Applications constitute 10% of the Trefis price estimate for Cisco's stock.

WHAT HAS CHANGED?

  1. Latest Earnings - Q2'21
Cisco delivered a weak performance for Q2 2021 (ending January 2021), with total revenue decreasing year-over-year to $11.96 billion, from $12 billion for the same period last year. Operating margins rose from 26.9% to 28.2%, as the company cut back on cost of sales and operating expenses. Despite this, EPS dropped from $0.68 to $0.60 mainly due to a higher effective tax rate.

BUSINESS SUMMARY

Cisco designs and sells networking and communications technology and services. It creates networking equipment such as switches and routers used primarily by businesses and Internet service providers to route data such as emails, videos, files and other digital communication. For example, an email that you send to a distant friend travels through various switches and routers made by companies like Cisco, Juniper, Huawei, and Alcatel-Lucent along the path to its destination.

SOURCES OF VALUE

Infrastructure Platforms

Over the past few years, Cisco has had a nearly 60% market share in Switches market(although the figure has declined in recent years). Similarly, Cisco's share in the router market has also been comfortably over 50% in recent years. Cisco's share in the enterprise WLAN market is also around 50%. The company's dominance in these market spaces is expected to to continue in the coming years, with competitors commanding a significantly lower share in these markets.

Network Services

In addition to networking hardware, Cisco provides maintenance and support services to its customers to help them fix problems that occur with networking equipment. Cisco's network service revenues and profits are dependent on the installed base of Cisco switch and router equipment.

Applications

Cisco also operates in other non hardware-centric segments such as Unified Communications, business messaging, conferencing, collaboration endpoints, end-to-end digital video systems, Data Over Cable System Interface Specification (DOCSIS), and access equipment. Cisco is a clear market leader in these market domains as well.