Cisco’s Huge Upside Potential Would Be A Good Bet On Your Portfolio (NASDAQ:CSCO)


Hannover Messe Industrial Trade Fair 2023

Alexander Koerner

Thesis

Cisco Systems, Inc. (NASDAQ:CSCO) has demonstrated poor revenue and net income growth over the past six years, resulting in a lackluster stock performance. However, after carefully considering analysts’ expectations and my own estimates, I have concluded that Cisco is significantly undervalued. I

TABLE OF ASSUMPTIONS
(Current data)
Assumptions Part 1
Equity Value 44,353.00
Debt Value 9,452.00
Cost of Debt 4.52%
Tax Rate 17.66%
10y Treasury 4.80%
Beta 0.94
Market Return 10.50%
Cost of Equity 10.16%
Assumptions Part 2
EBIT
Tax 2,705.00
D&A 1,631.00
CapEx 849.00
Capex Margin 1.49%
Assumption Part 3
Net Income 12,613.00
Interest 427.00
Tax 2,705.00
D&A 1,631.00
Ebitda 17,376.00
D&A Margin 2.86%
Interest Expense Margin 0.75%
Revenue 56,998.0

Revenue Net Income Plus Taxes Plus D&A Plus Interest
FY 2024 $57,930.0 $16,507.00 $19,421.97 $21,079.63 $21,513.62
FY2025 $59,330.0 $17,239.84 $20,284.22 $21,941.89 $22,375.87
FY 2026 $62,171.9 $18,074.25 $21,265.97 $23,045.02 $23,510.78
FY 2027 $65,149.9 $18,949.04 $22,295.25 $24,159.51 $24,647.58
FY 2028 $68,270.6 $19,866.18 $23,374.34 $25,327.90 $25,839.35
FY 2029 $71,540.8 $20,827.70 $24,505.65 $26,552.80 $27,088.74
^Final EBITA^

Revenue Net Income Plus Taxes Plus D&A Plus Interest
FY 2024 $56,428.0 $10,783.39 $12,687.63 $14,302.32 $14,725.05
FY2025 $63,563.9 $12,147.07 $14,292.12 $15,906.81 $16,329.54
FY 2026 $71,604.7 $13,683.65 $16,100.05 $18,149.02 $18,685.44
FY 2027 $80,665.2 $15,415.12 $18,137.28 $20,445.51 $21,049.82
FY 2028 $90,875.2 $17,366.25 $20,432.95 $23,033.35 $23,714.14
FY 2029 $102,380.8 $19,564.97 $23,019.94 $25,949.58 $26,716.56
^Final EBITA^

Revenue Net Income Plus Taxes Plus D&A Plus Interest
FY 2024 $56,428.0 $11,430.72 $13,452.43 $15,108.70 $15,575.09
FY2025 $63,563.9 $12,884.95 $15,163.87 $16,820.14 $17,286.53
FY 2026 $71,604.7 $14,625.71 $17,212.51 $19,314.24 $19,906.07
FY 2027 $80,665.2 $16,617.84 $19,556.98 $21,924.66 $22,591.38
FY 2028 $90,875.2 $18,901.76 $22,244.86 $24,912.22 $25,663.32
FY 2029 $102,380.8 $21,525.36 $25,332.48 $28,337.55 $29,183.75
^Final EBITA^



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