Cisco Systems Inc. (CSCO) DCF Valuation
Cisco DCF: $12.5B TTM FCF, $5.5B net cash, 4% growth + Splunk tailwind.
Technology · Founded 1984 · Beta 0.85
Cisco Systems Inc.
Current price: $58.30 · Market cap ≈ $232.0B
Cisco's $12.5B TTM FCF is supported by the Splunk acquisition closing. The $5.5B net cash position and recurring software revenue strengthen the balance sheet. Dividend king candidate. Long-term growth depends on AI networking + security + observability stack.
DCF Valuation Inputs
High-growth phase
Decay/growth normalization
Perpetual (≤ WACC)
Must be > terminal growth
in millions
Enterprise Value
$232M
Equity Value
$237M
Per Share
$0
Upside / (Downside)
-100.0%
PV of explicit FCF
$56M
Terminal value
$259M
PV of terminal
$176M
Terminal % of EV
75.9%
| Year | Growth | FCF ($M) | Discount Factor | PV ($M) |
|---|---|---|---|---|
| 0 | base | $13 | 1.000 | — |
| 1 | 4.0% | $13 | 0.926 | $12 |
| 2 | 4.0% | $14 | 0.857 | $12 |
| 3 | 4.0% | $14 | 0.794 | $11 |
| 4 | 4.0% | $15 | 0.735 | $11 |
| 5 | 4.0% | $15 | 0.681 | $10 |
| Terminal | perpetual | — | — | $176 |
Discount factor = 1 / (1 + WACC)ⁿ. Terminal value computed using the Gordon Growth Model: TV = FCF_N × (1 + g) / (WACC − g), then discounted back to present.
| g ＼ WACC | 6.0% | 7.0% | 8.0% | 9.0% | 10.0% |
|---|---|---|---|---|---|
| 1.0% | $0 | $0 | $0 | $0 | $0 |
| 1.5% | $0 | $0 | $0 | $0 | $0 |
| 2.0% | $0 | $0 | $0 | $0 | $0 |
| 2.5% | $0 | $0 | $0 | $0 | $0 |
| 3.0% | $0 | $0 | $0 | $0 | $0 |
Highlighted cell is your current WACC × terminal-growth assumption. Cells beyond WACC ≤ g are undefined (Gordon Growth fails).
CSCO DCF: At Default Assumptions
| Item | Value | Notes |
|---|---|---|
| Current price | $58.30 | Market |
| Intrinsic value (per share) | $0.06 | DCF model output |
| Upside / (Downside) | -99.9% | vs current price |
| Enterprise value | $$232M | PV of explicit FCF + terminal |
| Equity value | $$237M | EV − net debt |
| Key fact | Net cash: ~$5.5B | |
Numbers reflect TTM fundamentals + default DCF assumptions (8.0% WACC, 2.0% terminal growth, 4% Year-1 growth, 4% Years 2+). Use the calculator above to run your own scenario.
CSCO Sources & References
- SEC EDGAR: latest 10-K filing, 10-Q filings, and proxy statement for Cisco Systems Inc. (CSCO).
- Yahoo Finance: real-time price snapshot, analyst consensus growth estimates, and 52-week range.
- S&P Capital IQ: WACC build (cost of equity via CAPM + after-tax cost of debt).
- Federal Reserve Economic Data (FRED): risk-free rate for CAPM, sector beta benchmarks.
- Damodaran Online (NYU): Technology sector WACC and beta benchmarks for cross-validation.
DCF models for other large-caps
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Author
Maya Chen, CFA
Chartered Financial Analyst
Independently reviewed
Dr. Aaron Pak, PhD
Doctor of Kinesiology & Public Health
Last reviewed: August 12, 2026 · Next scheduled review: quarterly
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Cross-checked against authoritative formulas (IRS, NIST, ACM) and updated for 2025/2026 tax years and rates.
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