Cisco System's DCF Analysis Reveals Overvaluation

Cisco Systems Inc (CSCO) has shown impressive price performance over the past year, increasing by 61.6%. However, a recent DCF analysis conducted by GuruFocus suggests that the stock is significantly overvalued at its current price.

The earnings-based intrinsic value of CSCO is $49.37, while the FCF-based intrinsic value is $36.98. This indicates that both models agree on the overvaluation of Cisco Systems, with a margin of safety of -122.7% and -197.3%, respectively.

GuruFocus uses EPS without non-recurring items in its DCF analysis, as research has shown that stock prices correlate more closely with earnings than with free cash flow. The GF Value™ for Cisco is $72.79, providing a third perspective on valuation.