In the ever-evolving landscape of technology, two pivotal players, Cisco Systems, Inc. (CSCO) and Fortinet, Inc. (FTNT), stand out for their innovative approaches to networking and cybersecurity. While both companies operate within the technology sector, their distinct strategies and product offerings present a fascinating dichotomy. This comparison will delve into their market positions, growth potential, and innovation strategies, ultimately guiding you to determine which company may be the most compelling addition to your investment portfolio.
Table of contents
Company Overview
Cisco Systems, Inc. Overview
Cisco Systems, Inc. operates as a leader in the communication equipment sector, primarily focusing on designing and selling Internet Protocol-based networking products. Established in 1984 and headquartered in San Jose, California, Cisco’s mission is to empower businesses and governments globally with reliable, secure connectivity solutions. The company’s diverse portfolio includes enterprise routing, switching, wireless products, and an extensive array of security solutions. Cisco serves a wide range of clients, from small businesses to large governmental bodies, through direct sales and a network of partners. With a market cap of approximately 300.7B and a consistent dividend history, Cisco aims to enhance collaboration and connectivity in the digital landscape.
Fortinet, Inc. Overview
Fortinet, Inc., founded in 2000 and based in Sunnyvale, California, specializes in cybersecurity solutions. Its mission is to deliver broad, integrated, and automated security that protects organizations from cyber threats. Fortinet’s flagship products, such as FortiGate, provide comprehensive security and networking capabilities, including firewalls and intrusion prevention systems. The company caters to various sectors, including telecommunications, healthcare, and finance, selling directly and through channel partners. With a market cap of around 60.2B, Fortinet focuses on innovation and robust security measures to address the evolving challenges in cybersecurity.
Key similarities between Cisco and Fortinet lie in their commitment to technology and security solutions, targeting businesses of all sizes across various industries. However, while Cisco offers a broader range of networking and collaboration products, Fortinet is distinctly focused on cybersecurity, showcasing a more specialized approach in its business model.
Income Statement Comparison
The following table provides a comparison of the most recent income statements of Cisco Systems, Inc. (CSCO) and Fortinet, Inc. (FTNT) for the fiscal year ending in 2025.
| Metric | Cisco Systems, Inc. (CSCO) | Fortinet, Inc. (FTNT) |
|---|---|---|
| Revenue | 56.65B | 5.96B |
| EBITDA | 15.38B | 2.20B |
| EBIT | 12.52B | 2.08B |
| Net Income | 10.18B | 1.75B |
| EPS | 2.56 | 2.28 |
Interpretation of Income Statement
In 2025, Cisco reported a revenue increase to 56.65B, maintaining strong profitability with a net income of 10.18B. Conversely, Fortinet’s revenue of 5.96B also showcased growth, albeit at a slower pace compared to Cisco. Both companies exhibited stable margins, but Cisco’s performance indicates a slight decline in net income compared to prior years, suggesting potential challenges in sustaining growth. Fortinet, while smaller, demonstrated effective cost management, reflected in its rising EBIT margins, indicating an improving operational efficiency trend. Overall, both companies present distinct investment cases, with Cisco representing stability and Fortinet possibly reflecting growth potential.
Financial Ratios Comparison
In the table below, I present a comparative analysis of key financial ratios for Cisco Systems, Inc. (CSCO) and Fortinet, Inc. (FTNT). This will help you assess their financial health and performance.
| Metric | CSCO | FTNT |
|---|---|---|
| ROE | 21.73% | -2.48% |
| ROIC | 11.62% | 27.05% |
| P/E | 26.83 | 39.70 |
| P/B | 5.83 | -98.34 |
| Current Ratio | 0.998 | 1.471 |
| Quick Ratio | 0.908 | 1.393 |
| D/E | 0.633 | -2.142 |
| Debt-to-Assets | 24.24% | 10.18% |
| Interest Coverage | 7.38 | 90.17 |
| Asset Turnover | 0.463 | 0.610 |
| Fixed Asset Turnover | 16.59 | 4.41 |
| Payout Ratio | 63.23% | 0.00% |
| Dividend Yield | 2.36% | 0.00% |
Interpretation of Financial Ratios
Cisco exhibits strong profitability with a healthy ROE and a decent interest coverage ratio, indicating solid financial management. However, its P/E and P/B ratios suggest it might be overvalued compared to Fortinet, which, despite a negative ROE, showcases impressive ROIC. Fortinet’s low debt ratios indicate robust financial stability, but the absence of dividends may concern income-focused investors. Overall, I recommend careful consideration of these metrics according to your investment strategy.
Dividend and Shareholder Returns
Cisco Systems, Inc. (CSCO) offers a dividend yield of 2.36% with a payout ratio of approximately 63%. The increasing trend in dividend per share indicates a commitment to returning capital to shareholders, though caution is warranted regarding sustainability if earnings do not keep pace. Additionally, CSCO engages in share buybacks, enhancing shareholder value. In contrast, Fortinet, Inc. (FTNT) does not pay dividends, reinvesting profits for growth and innovation, which could align with long-term value creation despite the absence of direct shareholder returns.
Strategic Positioning
In the competitive landscape of the technology sector, Cisco Systems, Inc. (CSCO) holds a substantial market share in the communication equipment industry, bolstered by its diverse product offerings in networking and security solutions. With a market cap of $300.7B, Cisco faces pressure from Fortinet, Inc. (FTNT), a key player in cybersecurity, which has a market cap of $60.2B. Both companies are navigating technological disruptions, but Cisco’s established brand and expansive customer base provide a competitive edge. Meanwhile, Fortinet’s innovative cybersecurity solutions continue to gain traction, indicating a dynamic market environment.
Stock Comparison
In this analysis, I will examine the weekly stock price movements of Cisco Systems, Inc. (CSCO) and Fortinet, Inc. (FTNT) over the past year, highlighting key price dynamics and trading behaviors that have shaped their trajectories.
Trend Analysis
Cisco Systems, Inc. (CSCO) has experienced a significant price change of 50.63% over the past year, marking a bullish trend. The stock has shown acceleration, with notable highs reaching $78.00 and lows at $45.47. The recent trend from September 7, 2025, to November 23, 2025, indicates a 13.75% increase, supported by a relatively low standard deviation of 3.56, suggesting stable price movements.
Fortinet, Inc. (FTNT), on the other hand, has seen a 34.73% price increase over the same period, also reflecting a bullish trend. However, the trend is in a state of deceleration, with highs of $111.64 and lows of $56.51. The recent performance shows a minimal price change of 0.04% from September 7, 2025, to November 23, 2025, alongside a standard deviation of 2.53, indicating reduced volatility in its price movements.
Both stocks exhibit positive long-term trends, but the acceleration in CSCO’s growth may present a more favorable outlook in the near term compared to FTNT’s decelerating trend.
Analyst Opinions
Recent analyst recommendations for Cisco Systems, Inc. (CSCO) indicate a “Buy” rating, with analysts highlighting strong performance in return on equity and assets. Notably, analysts appreciate CSCO’s solid discounted cash flow metrics. On the other hand, Fortinet, Inc. (FTNT) has garnered a “Buy” rating as well, with analysts praising its robust return on equity and assets, alongside favorable cash flow scores. Overall, the consensus for both companies in 2025 leans toward a “Buy” sentiment, suggesting potential upside for investors.
Stock Grades
In the current market landscape, analyzing stock grades from reputable sources is essential for making informed investment decisions. Here are the latest ratings for Cisco Systems, Inc. and Fortinet, Inc.
Cisco Systems, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Citigroup | maintain | Buy | 2025-11-13 |
| B of A Securities | maintain | Buy | 2025-11-13 |
| Evercore ISI Group | maintain | In Line | 2025-11-13 |
| Barclays | maintain | Equal Weight | 2025-11-13 |
| UBS | maintain | Buy | 2025-11-13 |
| Morgan Stanley | maintain | Overweight | 2025-11-13 |
| Piper Sandler | maintain | Neutral | 2025-11-13 |
| Wells Fargo | maintain | Overweight | 2025-11-13 |
| Keybanc | maintain | Overweight | 2025-11-13 |
| JP Morgan | maintain | Overweight | 2025-11-13 |
Fortinet, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Jefferies | maintain | Hold | 2025-11-06 |
| RBC Capital | maintain | Sector Perform | 2025-11-06 |
| Rosenblatt | maintain | Neutral | 2025-11-06 |
| Mizuho | maintain | Underperform | 2025-11-06 |
| TD Cowen | maintain | Hold | 2025-11-06 |
| Barclays | maintain | Equal Weight | 2025-11-06 |
| Baird | maintain | Neutral | 2025-11-06 |
| JP Morgan | maintain | Neutral | 2025-11-06 |
| UBS | maintain | Neutral | 2025-11-06 |
| Piper Sandler | maintain | Neutral | 2025-11-06 |
Overall, Cisco maintains a strong presence with multiple “Buy” ratings, indicating investor confidence. In contrast, Fortinet’s grades reflect a more cautious sentiment, with several “Hold” and “Neutral” ratings, suggesting a need for careful evaluation before making investment decisions.
Target Prices
The current consensus from analysts indicates positive expectations for both Cisco Systems, Inc. (CSCO) and Fortinet, Inc. (FTNT).
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Cisco Systems, Inc. | 88 | 69 | 76.75 |
| Fortinet, Inc. | 110 | 67 | 88.5 |
For Cisco, the consensus target price of 76.75 aligns closely with its current price of 76.1, suggesting a balanced outlook. Fortinet’s target consensus of 88.5 indicates strong growth potential compared to its current price of 78.855.
Strengths and Weaknesses
The following table outlines the strengths and weaknesses of Cisco Systems, Inc. (CSCO) and Fortinet, Inc. (FTNT) based on the most recent data.
| Criterion | Cisco Systems, Inc. (CSCO) | Fortinet, Inc. (FTNT) |
|---|---|---|
| Diversification | High; offers a wide range of networking and security solutions | Moderate; focused primarily on cybersecurity solutions |
| Profitability | Net profit margin of 17.97% | Net profit margin of 29.30% |
| Innovation | Strong R&D investments in networking and security | Rapidly evolving product portfolio in cybersecurity |
| Global presence | Established presence in multiple regions worldwide | Growing global footprint, especially in cybersecurity markets |
| Market Share | Significant in networking hardware | Increasing in cybersecurity software |
| Debt level | Debt-to-equity ratio of 0.633 | Debt-to-equity ratio of -2.141, indicating a reliance on equity financing |
Key takeaways indicate that while Cisco boasts a diversified portfolio and significant market presence, Fortinet demonstrates higher profitability and is rapidly advancing in the cybersecurity sector. Understanding these factors can guide investment decisions in the tech sector.
Risk Analysis
In the following table, I outline various risks associated with Cisco Systems, Inc. (CSCO) and Fortinet, Inc. (FTNT) to help you assess potential vulnerabilities in your investment decisions.
| Metric | Cisco Systems, Inc. (CSCO) | Fortinet, Inc. (FTNT) |
|---|---|---|
| Market Risk | Moderate | High |
| Regulatory Risk | Moderate | Moderate |
| Operational Risk | Low | Moderate |
| Environmental Risk | Low | Moderate |
| Geopolitical Risk | Moderate | High |
Both companies face significant market risks due to increasing competition and technological changes. Fortinet’s higher market and geopolitical risks stem from its cybersecurity focus in a rapidly evolving landscape. Investors should remain cautious, especially regarding geopolitical tensions that could impact both firms.
Which one to choose?
In comparing Cisco Systems, Inc. (CSCO) and Fortinet, Inc. (FTNT), I observe that both companies exhibit bullish trends, but with differing fundamentals. Cisco shows a strong gross profit margin of 65% and a net income margin of 18%, coupled with a market cap of 273B. Its overall rating is B, indicating solid financial health. Conversely, Fortinet boasts a higher gross profit margin of 81% and a net income margin of 29%, yet it has a lower market cap of 72B and a higher price-to-earnings ratio of 41.4, which may indicate overvaluation.
For growth-oriented investors, Fortinet may appear more attractive due to its higher profitability ratios. However, those seeking stability might prefer Cisco, which has a longer history and consistent cash flow.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of Cisco Systems, Inc. and Fortinet, Inc. to enhance your investment decisions:
