Cisco: The AI Top-Line Boom Can't Hide The Free Cash Flow Problem

DividendClub101 FollowersFollow5ShareSavePlay(10min)Comment(1)SummaryCisco Systems is rated Sell, with fair value estimated at $69, well below its current price.The $28B Splunk acquisition tripled CSCO's debt and structurally compressed free cash flow, which still has not recovered to pre-Splunk levels.An annual penny increase to the quarterly dividend per share is not likely to get boosted anytime soon. Sundry Photography/iStock Editorial via Getty Images Investment Thesis Cisco Systems, Inc. (CSCO) is still paying for the company record acquisition of Splunk. The most recent quarter shows revenue is accelerating, but tripled balance sheet debt and structurally compressed free cashThis article was written byDividendClub101 FollowersFollowPursuing dividend growth investing to generate passive income ultimately gaining financial independence, living of dividend income. With +30 year horizon I tend to prefer dividend growth over high starting dividend yield with low growth. Articles are based on my own opinion and should not be seen as investment adviceAnalyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.