CSCO
Cisco Systems, Inc.
Technology · Communication Equipment · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- High scores in financial health and momentum reflect a conservatively leveraged balance sheet and consistent sequential improvement across all key income metrics.
- Solid profitability metrics including a 20.8% operating margin and 18.0% net margin anchored the mid-to-high range of the composite score.
- A below-midpoint growth score, driven by declining net income and near-flat EPS in FY2025, and a zero theme score prevented a higher overall ranking.
Why Not Higher
- The growth factor was penalized by a 1.4% decline in net income and only 0.4% EPS growth in FY2025, limiting the composite score despite strong revenue expansion.
- The macro theme assignments to AI Infrastructure and Data Centers & Cloud Infrastructure did not translate into a positive model score, leaving meaningful potential points uncaptured.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024's $53,803,000,000 to FY2025's $56,654,000,000, a gain of +5.3%, but net income declined -1.4% from FY2024's $10,320,000,000 to FY2025's $10,180,000,000, and diluted EPS was nearly flat at +0.4% from FY2024's $2.54 to FY2025's $2.55.
The model rewarded modest top-line expansion but penalized the contraction in net income and the near-stagnant EPS, resulting in a below-midpoint growth score that reflects mixed signals across the three growth dimensions.
In FY2025, Cisco posted an operating margin of 20.8%, a net margin of 18.0%, and a return on assets of 8.3%.
These figures indicate that the model recognized solid earnings efficiency at both the operating and net levels, as well as meaningful asset productivity, supporting a high profitability sub-score.
In FY2025, Cisco carried a debt-to-equity ratio of 0.53 against total assets of $122,291,000,000.
A debt-to-equity ratio of 0.53 in FY2025 signals a conservative leverage profile, and the scale of the asset base provides a broad foundation for obligations, both of which the model rewarded with a near-maximum financial health score.
Revenue rose consecutively from $14,673,000,000 in 2025Q4 to $14,883,000,000 in 2026Q1, $15,349,000,000 in 2026Q2, and $15,841,000,000 in 2026Q3; net income climbed from $2,550,000,000 in 2025Q4 to $2,860,000,000, $3,175,000,000, and $3,373,000,000 over the same quarters; and operating income advanced from $3,087,000,000 in 2025Q4 to $3,363,000,000, $3,781,000,000, and $3,960,000,000 in 2026Q1 through 2026Q3.
All three metrics show uninterrupted sequential acceleration across the four most recent quarters, a consistent upward trend that the model rewarded with a high momentum score.
Cisco's dividends per share rose steadily from $1.50 in FY2022 to $1.54 in FY2023, $1.58 in FY2024, and $1.62 in FY2025, while the FY2025 dividend payout ratio stood at 63.2%.
The model credited the consistent multi-year dividend growth trend but the relatively high payout ratio of 63.2% in FY2025 likely constrained the score, as it leaves less room for future dividend increases or reinvestment.
Cisco is assigned to the macro themes of AI Infrastructure and Data Centers & Cloud Infrastructure.
Although the company carries assignments to two high-profile macro themes, this assignment did not translate into a positive score under the model's current methodology.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Cisco Systems earned a composite score of 67.7/100 and is classified as a Core Holding Candidate with a Low risk rating, reflecting a company that combines solid profitability and financial health with only modest top-line growth. In FY2025, revenue grew 5.3% to $56.7 billion while net income slipped 1.4% and diluted EPS was nearly flat at $2.55, producing mixed growth signals. Profitability metrics were strong, with a 20.8% operating margin, 18.0% net margin, and 8.3% return on assets, and the balance sheet remained conservative with a debt-to-equity ratio of 0.53 against $122.3 billion in total assets. Most notably, sequential quarterly momentum has been consistently accelerating across revenue, net income, and operating income through 2026Q3, suggesting improving operational execution.
Plain English
Cisco is a large, financially stable tech company that is growing steadily and becoming more profitable each quarter, though its overall annual growth was modest last year and its dividend payments consume a significant chunk of earnings.
Bull Case vs. Bear Case
Bull Case
- Uninterrupted sequential acceleration in revenue, net income, and operating income across four consecutive quarters through 2026Q3 signals strengthening operational momentum.
- A 20.8% operating margin and 18.0% net margin in FY2025 demonstrate that Cisco converts revenue into earnings efficiently, supporting durable profitability.
- A conservative debt-to-equity ratio of 0.53 and a $122.3 billion asset base provide a strong financial foundation and flexibility to navigate economic uncertainty.
Bear Case
- Net income declined 1.4% in FY2025 even as revenue grew, indicating that cost pressures or investments are compressing bottom-line results.
- Diluted EPS was nearly flat at +0.4% year-over-year, suggesting limited earnings-per-share expansion for shareholders despite top-line growth.
- A dividend payout ratio of 63.2% in FY2025 leaves relatively little room for future dividend increases or reinvestment into growth initiatives.
What Could Change the Picture
Bullish Triggers
- Sustained acceleration in quarterly net income from $2.55 billion in 2025Q4 to $3.37 billion in 2026Q3 could signal that annual earnings growth is set to recover meaningfully.
- If the AI Infrastructure and Data Centers & Cloud Infrastructure macro themes begin to drive measurable revenue contribution, growth scores could improve substantially.
Bearish Triggers
- A payout ratio of 63.2% combined with flat EPS growth could pressure Cisco's ability to maintain its multi-year dividend growth streak if earnings stagnate.
- If the strong quarterly momentum reverses, the high momentum score that currently supports the composite rating would deteriorate, lowering overall conviction.
Risk Profile
Low RiskCisco's Low risk rating is supported by a debt-to-equity ratio of 0.53 and a $122.3 billion asset base, which together indicate a conservative leverage profile with ample capacity to meet obligations. Sequential improvements in revenue and operating income across four consecutive quarters through 2026Q3 further reduce near-term operational risk.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.