Cisco Systems, Inc.

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker Analyst Analyst Email
Needham Alex Henderson ahenderson@needhamco.com
CRT Capital Group Alex Kurtz akurtz@sterneageecrt.com
Pacific Crest Securities-KBCM Brent Bracelin bbracelin@pacific-crest.com
Drexel Hamilton Brian J. White bwhite@drexelhamilton.com
JMP Securities Erik Suppiger esuppiger@jmpsecurities.com
Jefferies George C. Notter gnotter@jefferies.com
Oppenheimer Ittai Kidron ittai.kidron@opco.com
William Blair Jason Ader jader@williamblair.com
Nomura Research Jeffrey Kvaal jeffrey.kvaal@nomura.com
Wells Fargo Securities Jess Lubert jess.lubert@wellsfargo.com
Atlantic Equities Josep Bori j.bori@atlantic-equities.com
Credit Suisse Kulbinder Garcha kulbinder.garcha@credit-suisse.com
Wunderlich Securities Matthew Robison mrobison@wundernet.com
RBC Capital Markets Mitch Steves mitch.steves@rbccm.com
Cowen & Company Paul Silverstein paul.silverstein@cowen.com
Bernstein Research Pierre Ferragu pierre.ferragu@bernstein.com
Buckingham Research Rohit Chopra rchopra@buckresearch.com
Guggenheim Securities Ryan Hutchinson ryan.hutchinson@guggenheimpartners.com
FBN Securities Shebly Seyrafi sseyrafi@fbnsecurities.com
Raymond James Simon Leopold simon.leopold@raymondjames.com
BMO Capital Markets Tim Long tim.long@bmo.com
Piper Jaffray Troy D. Jensen troy.d.jensen@pjc.com
Deutsche Bank Research Vijay Bhagavath vijay.bhagavath@db.com
Daiwa Securities Co. Ltd. Yoko Yamada yoko.yamada@us.daiwacm.com

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Primary Input Data

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Derived Input Data

Derived Input

Label

2015 Value

2016
Value

Equational Form
Net Operating Profit Less Adjusted Taxes NOPLAT 7,649  8,357 NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)
Free Cash Flow FCF 12,283 12,317 FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS
Tax Shield TS 112 145 TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income
Invested Capital IC 88,729 103,383 IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital
Return on Invested Capital ROIC 8.62% 8.08% ROIC\,=\,\frac { NOPLAT }{ IC }
Net Investment NetInv 6,261 16,839 NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation
Investment Rate IR 81.86% 201.49% IR\,=\,\frac {NetInv}{NOPLAT}
Weighted Average Cost of Capital
 WACCMarket 7.40% 3.80% WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)
 WACCBook  8.80%  9.38%
Enterprise value
 EVMarket 118,608  117,486 EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash
 EVBook  114,141  112,507
Long-Run Growth
 g = IR x ROIC
 7.06%  16.29% Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
g = % \Delta GDP  2.50%  2.50%
Margin from Operations M 23.94%  26.41% M\,\,=\,\,\frac{EBIT}{SALES}
Depreciation/Amortization Rate D 15.13%  14.53% D\,\,=\,\,\frac{D+A}{EBITDA}

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form

Observed Value

Single-stage

multiple g solution

Two-stage valuation

model g solution
12/31/2015 12/31/2016 12/31/2015 12/31/2016 12/31/2015 12/31/2016

EV/SALES 

\frac {EV}{Sales} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)

  2.41  2.41  3.76%  -27.63%  1.23%  -15.31%

EV/EBITDA

\frac {EV}{EBITDA} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)

 8.55 7.81 3.76% -27.63% 1.23% -15.31%

EV/NOPLAT

\frac {EV}{NOPLAT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}

 15.51 14.06 3.76% -27.63% 1.23% -15.31%

EV/FCFOPS

\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

 9.66 9.54 3.76% -27.63% 1.23% -15.31%

EV/EBIT

\frac {EV}{EBIT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

 10.08 9.14 3.76% -27.63% 1.23% -15.31%

EV/IC

\frac {EV}{IC} \,= \,\frac{ROIC\,  -\,  g}{WACC\,-\,g}

 1.34 1.14 3.76% -27.63% 1.23% -15.31%

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