CSCO
Cisco Systems, Inc.
$107.26
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 114.7% above fair value
You pay
$107.26
Bear
$39.96
Fair
$49.95
Bull
$59.94
Bear
$39.96
-62.7%
$3.33 × 12x P/E
Fair
$49.95
-53.4%
$3.33 × 15x P/E
Bull
$59.94
-44.1%
$3.33 × 18x P/E
Adjust Assumptions
15.0x
3.33$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
32.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (74 analysts)
$129.77
Divergence from AlphaVal
62%
Summary
Applying a 15x P/E to adjusted EPS of $3.33, the base-case value is $49.95 per share. DDM cross-check: $28.56.
Warnings
Dividend-based valuation: $28.56 (below our primary estimate by 43%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $129.77 (from 74 analysts). Our estimate is 62% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples