1、CrispIdea|R E S E A R C HCisco Systems,Inc.E Q U I T Y R E S E A R C H Technology|Consumer Electronics|Jul 28,2025Cisco Systems,Inc.Driving AI growth,managing transition risksWe maintain a“Hold”rating for CSCO,with the upgraded TP of$73.11 for FY26.This provides an upside potential of 7.43%over the

2、CMP of$68.05.We estimated the adjusted EPS of$4.08 for FY26.We estimate a forward P/E multiple of 17.9x and EV/EBITDA of 15.79x for FY26.Our estimates are based on the following factors:1)Robust financial performance&shareholder returns 2)Leadership in core networking&high-growth markets 3)Expanding

3、 software/subscription revenue model 4)Innovative product portfolio and integration 5)Strategic partnerships and ecosystem strengthRobust financial performance&shareholder returns:Cisco delivered strong Q3 results with a revenue of$14.1B which was up 11%YoY and GAAP EPS rose 35%.Operating cash flow

4、was$4.1B,and the company returned$3.1B to investors in the quarter with$1.6B in dividends and$1.5B in buybacks.This cash-generation consistency underpins Ciscos ability to reward shareholders while reinvesting in growth.Leadership in core networking&high-growth markets:In Q3FY25 Ciscos broad custome

5、r demand drove a 20%YoY jump in product orders,with strength across enterprise grew 22%YoY,service provider/cloud were up 32%YoY,and public sector was up 8%YoY.Core Switching and Routing products grew in double digits,and the Security portfolio(now including Splunk and SASE)soared 54%YoY.Critically,

6、Cisco is capitalizing on AI/data center trends.AI infrastructure orders from hyperscalers exceeded$600 million in Q3,surpassing the$1B target a quarter early,underscoring Ciscos strategic position in the AI-ready networking market.Expanding software/subscription revenue model:Ciscos transition to re