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Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue.
Cisco Systems's Degree of Operating Leverage for the quarter that ended in Jul. 2026 was 3.20. The higher Degree of Operating Leverage, the higher operating risk the company will take.
The industry rank for Cisco Systems's Degree of Operating Leverage or its related term are showing as below:
XSWX:CSCO's Degree of Operating Leverage is ranked worse than 68.24% of 2440
companies
in the Hardware industry
Industry Median: 1.14
vs XSWX:CSCO: 3.20
Cisco Systems (XSWX:CSCO) Degree of Operating Leverage Explanation
Degree of Operating Leverage (DOL) is a leverage ratio that measures the sensitivity of a company’s operting income, also referred to as Earnings Before Interest and Taxes (EBIT), to fluctuations in its Revenue. DOL is a method used to quantify a company’s operating risk. This risk is related to the company's structure of variable costs and fixed costs. Since the fixed costs do not allow the company to adjust the operating costs, the operating risk rises with a higher fixed-to-variable costs proportion.
A high Degree of Operating Leverage indicates that the company’s fixed costs exceed its variable costs. By increasing the sales, the company can earn more profits. In addition, the company must be able to maintain relatively high sales to cover all fixed costs.
Be Aware
The use of operating leverage varies across different industries and business sectors, and the application of Degree of Operating Leverage (DOL) should be adjusted accordingly.
Cisco Systems Degree of Operating Leverage Related Terms
Cisco Systems Degree of Operating Leverage Historical Data
* Premium members only.
The historical data trend for Cisco Systems's Degree of Operating Leverage can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
XSWX:CSCO vs MSI, HPE, LITE: Degree of Operating Leverage Comparison
For the Communication Equipment subindustry, Cisco Systems's Degree of Operating Leverage, along with its competitors' market caps and Degree of Operating Leverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Cisco Systems Degree of Operating Leverage vs Hardware Industry
For the Hardware industry and Technology sector, Cisco Systems's Degree of Operating Leverage distribution charts can be found below:
* The bar in red indicates where Cisco Systems's Degree of Operating Leverage falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
** TTM data of EBIT and Revenue was used to calculate Degree of Operating Leverage.
*** Please be aware that the Degree of Operating Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
What does a Degree of Operating Leverage of 3.20 mean?
Cisco Systems (XSWX:CSCO) has a Degree of Operating Leverage of 3.20 as of Jul. 2026. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for Cisco Systems and its competitors. According to the industry distribution chart, Cisco Systems ranks #1665 out of 2440 companies in the Hardware industry, placing it in the top 68.2%.
Is Cisco Systems' Degree of Operating Leverage too high?
Cisco Systems' current Degree of Operating Leverage is 3.20. The Hardware industry median Degree of Operating Leverage is 1.14. Cisco Systems' value of 3.20 is 180.7% above this industry median. Based on the distribution chart, Cisco Systems ranks #1665 out of 2440 companies in the Hardware industry, which is below the industry midpoint. Overall, Cisco Systems has a GF Score™ of 85/100, reflecting its overall financial health beyond just this single metric.
How does Cisco Systems' Degree of Operating Leverage compare to MSI and HPE?
According to the Hardware industry distribution chart, Cisco Systems ranks #1665 out of 2440 companies for Degree of Operating Leverage. This places Cisco Systems in the lower half of its industry. The industry median Degree of Operating Leverage is 1.14. Cisco Systems' value of 3.20 is 180.7% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Degree of Operating Leverage for a Hardware company?
The median Degree of Operating Leverage among Hardware companies is 1.14, based on 2,440 companies in the industry. Companies in the top quartile (top 25%) have a Degree of Operating Leverage significantly above this median, while those in the bottom quartile fall well below. However, Degree of Operating Leverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Cisco Systems's current Degree of Operating Leverage of 3.20 is 180.7% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Degree of Operating Leverage mean?
A high Degree of Operating Leverage can signal that a stock is expensive relative to its fundamentals. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for Cisco Systems and its competitors. For the Hardware industry, the median Degree of Operating Leverage is 1.14 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Cisco Systems's current Degree of Operating Leverage is 3.20. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Cisco Systems stock overvalued right now?
Cisco Systems (XSWX:CSCO) has a current Degree of Operating Leverage of 3.20. The stock's GF Value™ is CHF58.69, compared to a current price of CHF88.82 — trading 51.3% above its estimated fair value. The current Degree of Operating Leverage is 3.20 and 180.7% above the Hardware industry median of 1.14. Cisco Systems' overall GF Score™ is 85/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Degree of Operating Leverage calculated?
Degree of Operating Leverage is calculated from a company's financial statements. For Cisco Systems (XSWX:CSCO), the current Degree of Operating Leverage is 3.20 as of Jul. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Cisco Systems (XSWX:CSCO) Overvalued in 2026?
Based on GuruFocus' analysis, Cisco Systems stock appears to be overvalued.
The current stock price of CHF88.82 is trading 51.3% above its estimated GF Value™ of CHF58.69.
Key valuation signals for XSWX:CSCO:
Degree of Operating Leverage: 3.20
GF Value™: CHF58.69 vs. price of CHF88.82 (51.3% above fair value)
Industry Position: 180.7% above the Hardware median (#1665 of 2440)
No single metric tells the full story. See the XSWX:CSCO stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Cisco Systems is the largest provider of networking equipment in the world and one of the largest software companies in the world. Its largest businesses are selling networking hardware and software (where it has leading market shares) and cybersecurity software such as firewalls. It also has collaboration products, like its Webex suite, and observability tools. It primarily outsources its manufacturing to third parties and has a large sales and marketing staff—25,000 strong across 90 countries. Overall, Cisco employs 80,000 people and sells its products globally.
85GF Score
Get the complete analysis for XSWX:CSCO
Degree of Operating Leverage is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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