Is Cisco Systems, Inc. overvalued or undervalued?

As of 7 November 2025, Cisco Systems, Inc. has moved from a fair to an expensive valuation grade. The company appears to be overvalued, given its P/E ratio of 25, which is higher than its peer Accenture Plc at 21.26 and significantly lower than IBM's 82.85. Additionally, Cisco's EV to EBITDA stands at 18.15, compared to Accenture's 13.98, indicating a premium valuation relative to its peers.
In terms of financial performance, Cisco boasts a strong ROE of 22.92% and a ROCE of 20.71%, reflecting efficient capital utilization. However, the elevated valuation ratios suggest that investors may be paying a premium for these returns. Notably, Cisco has outperformed the S&P 500 year-to-date with a return of 21.77% compared to the index's 14.40%, but its 3-year return of 61.82% lags behind the S&P's 76.76%, reinforcing the notion of an expensive valuation in the current market context.