Cisco Systems Inc (CSCO) is overvalued and Telefonaktiebolaget L M Ericsson ADR (ERIC) is undervalued.
Against our estimates of intrinsic value, ERIC trades at the wider discount: a margin of safety of +23%, against -101% for CSCO.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 9.7% (average of 3 methods) values the shares at $53.03; the price of $106.44 is 101% above that value, and 73% of that value comes from beyond year five.
Leak Score 44/100 on 10 of 12 signals
Discounting its cash flows at 9.3% (average of 3 methods) values the shares at $12.69; the price of $9.82 is 23% below that value, and 74% of that value comes from beyond year five.
Leak Score 100/100 on 3 of 12 signals
| Metric | CSCO | ERIC |
|---|---|---|
| Verdict | Overvalued | Undervalued |
| Price | $106.44 | $9.82 |
| Intrinsic value | $53.03 | $12.69 |
| Margin of safety | -101% | +23% |
| Leak Score | 44/100 (10/12) | 100/100 (3/12) |
| Market cap | $419.6B | $29.9B |
| Revenue growth, 5 years | 4.9% | -0.9% |
| Operating margin | 25.2% | 13.8% |
| Net margin | 20.9% | 10.8% |
| Return on equity | 27.3% | 26.3% |
| Debt to equity | 0.62 | 0.38 |
| P/E | 32.0x | 12.6x |
| Forward P/E | 19.2x | 14.9x |
| P/B | 8.3x | 3.0x |
| Dividend yield | 1.6% | 3.3% |