/Cisco%20Systems%2C%20Inc_%20HQ-by%20Sundry%20Photography%20via%20iStock.jpg?ssl=1 "Cisco Systems Reported Lower FCF and Margins – Has CSCO Stock Peaked?")
By Mark R. Hake, CFA
Publication Date: 2026-05-17 13:30:00
Cisco Systems, Inc_ HQ-by Sundry Photography via iStock
Cisco Systems (CSCO) reported lower free cash flow compared to last year, as well as lower FCF margins. Nevertheless, CSCO’s fair value could be 16% higher based on significantly higher revenue forecasts. Value buyers are shorting near-term CSCO puts to set a lower buy-in price and shorting covered calls in case it stays flat or rises slightly.
CSCO was up over 1.4% on Friday, May 15, at $117.59 in midday trading. That is a peak price, so value investors are looking for a lower entry point. One way to do this is to short out-of-the-money (OTM) puts and calls. This article will show how to do this.
Lower Cash Flow in Fiscal Q3
Cisco Systems, the internet security software and hardware company benefiting from sales to AI hyperscalers, reported that its fiscal Q3 revenue (ending April 25) rose +12% YoY, and for the 9 months was up +9.75%.
Most of that was from hardware…
