In today’s fast-evolving technology landscape, Cisco Systems, Inc. (CSCO) and Fortinet, Inc. (FTNT) stand out as major players in the communication equipment and cybersecurity sectors, respectively. Both companies are at the forefront of innovation, addressing the increasing demand for secure and reliable networking solutions. This analysis will explore their strategies, market positions, and growth potential to help you, the investor, determine which company presents the most compelling opportunity for your portfolio.
Table of contents
Company Overview
Cisco Systems, Inc. Overview
Cisco Systems, Inc. is a leader in the communication equipment sector, specializing in designing, manufacturing, and selling Internet Protocol-based networking products. Founded in 1984 and headquartered in San Jose, California, Cisco aims to connect people, devices, and networks securely and efficiently. Its broad product portfolio includes enterprise routing, switching solutions, and a range of security offerings such as network security, identity management, and threat intelligence. Cisco serves a diverse clientele, including businesses, public institutions, and service providers, employing roughly 90K individuals globally. The company’s commitment to innovation and strategic partnerships positions it as a key player in the technology landscape.
Fortinet, Inc. Overview
Fortinet, Inc., established in 2000 and based in Sunnyvale, California, focuses on providing cutting-edge cybersecurity solutions. With a market capitalization of approximately $62B, Fortinet delivers a comprehensive range of products, including firewalls, intrusion prevention systems, and secure access solutions. Its FortiGate platform is well-regarded for integrating security and networking functions. The company serves various sectors, including telecommunications, government, and healthcare, and employs around 15K people. Fortinet’s emphasis on automated and integrated security solutions helps businesses safeguard their digital assets in an increasingly complex cyber environment.
Key similarities and differences
Both Cisco and Fortinet operate within the technology sector, focusing on security and networking solutions. However, Cisco’s offerings are broader, encompassing a wide range of communication equipment beyond security. In contrast, Fortinet specializes primarily in cybersecurity, providing automated and integrated security solutions tailored for various industries. This distinction highlights Cisco’s diverse portfolio compared to Fortinet’s focused approach.
Income Statement Comparison
The following table compares the income statements of Cisco Systems, Inc. (CSCO) and Fortinet, Inc. (FTNT) for their most recent fiscal years, highlighting key financial metrics.
| Metric | [Cisco Systems, Inc.] | [Fortinet, Inc.] |
|---|---|---|
| Market Cap | 304.27B | 61.98B |
| 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 |
| Fiscal Year | 2025 | 2024 |
Interpretation of Income Statement
In the latest fiscal year, Cisco experienced a revenue increase to 56.65B, reflecting a growth trend despite a slight decline from the previous year’s peak. Fortinet also reported solid revenue growth, reaching 5.96B, indicative of a robust demand for cybersecurity solutions. Cisco’s EBITDA margin remained stable, while Fortinet showed improved margins, suggesting effective cost management. Cisco’s net income decreased slightly, highlighting potential challenges in maintaining profitability, whereas Fortinet’s net income growth signals a successful scaling of operations. Both companies exhibit resilience, but investors should monitor these trends closely for future performance.
Financial Ratios Comparison
In this section, I present a comparative analysis of the most recent financial ratios for Cisco Systems, Inc. (CSCO) and Fortinet, Inc. (FTNT).
| Metric | CSCO | FTNT |
|---|---|---|
| ROE | 21.73% | -247.69% |
| ROIC | 11.62% | 27.05% |
| P/E | 26.83 | 41.38 |
| 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% |
| Dividend yield | 2.36% | 0% |
Interpretation of Financial Ratios
When analyzing these ratios, CSCO appears to maintain a solid performance, particularly with a strong ROE and stable dividend yield. However, its high P/B ratio indicates potential overvaluation. FTNT shows impressive ROIC but suffers from a troubling negative ROE and high valuation multiples (P/E and P/B), suggesting significant concerns about profitability and financial stability. It is crucial to be cautious with FTNT, as its financial metrics indicate higher risk.
Dividend and Shareholder Returns
Cisco Systems, Inc. (CSCO) offers a stable dividend, with a payout ratio of approximately 63% and an annual yield of about 2.36%. The company has engaged in share buybacks, indicating a commitment to returning value to shareholders. However, risks include potential unsustainable distributions if earnings fluctuate.
In contrast, Fortinet, Inc. (FTNT) does not pay dividends, opting instead to reinvest earnings for growth and R&D. They also conduct share buybacks, which may support long-term shareholder value despite the absence of dividends. Both approaches reflect differing strategies, with CSCO focusing on immediate returns and FTNT prioritizing future growth.
Strategic Positioning
Cisco Systems, Inc. (CSCO) holds a commanding presence in the communication equipment sector with a market cap of 304B, leveraging a diverse product portfolio that includes networking and security solutions. Fortinet, Inc. (FTNT), with a market cap of 62B, competes vigorously in the cybersecurity domain, offering comprehensive security solutions. Both companies face competitive pressure from emerging technologies and startups, necessitating continuous innovation to maintain market share and counter technological disruptions.
Stock Comparison
In this section, I will analyze the stock price movements and trading dynamics of Cisco Systems, Inc. (CSCO) and Fortinet, Inc. (FTNT) over the past year, highlighting key trends and performance metrics.
Trend Analysis
Cisco Systems, Inc. (CSCO) Over the past year, CSCO has experienced a significant price increase of 53.6%. This bullish trend is characterized by acceleration, with a standard deviation of 8.66, indicating moderate volatility. The stock reached a notable high of $78.00 and a low of $45.47. In the recent trend from September 14, 2025, to November 30, 2025, CSCO shows a price change of 15.65%, further confirming the upward trajectory.
Fortinet, Inc. (FTNT) FTNT has also demonstrated a strong performance with a 39.06% increase in price over the last year, marking a bullish trend. However, this trend exhibits deceleration, with a higher standard deviation of 16.01, suggesting greater volatility compared to CSCO. The stock’s price fluctuated between a high of $111.64 and a low of $56.51. In the recent period from September 14, 2025, to November 30, 2025, FTNT’s price change was 1.82%, indicating a neutral trend in the short term.
In summary, both stocks exhibit strong long-term performance, with CSCO showing robust acceleration in its recent trend, while FTNT is experiencing a slower upward movement.
Analyst Opinions
Recent analyst recommendations for Cisco Systems, Inc. (CSCO) suggest a “Buy” rating with a solid overall score of 3. Analysts highlight strong metrics in discounted cash flow and return on equity. Fortinet, Inc. (FTNT) also holds a “Buy” rating with a slightly higher score of B+, reflecting robust performance in return on assets and equity. Both stocks show favorable growth potential, leading to a consensus of “Buy” for the current year. Analysts emphasize the importance of these companies’ fundamentals in the evolving tech landscape.
Stock Grades
In the current market landscape, I have gathered reliable stock grades for two notable companies: Cisco Systems, Inc. (CSCO) and Fortinet, Inc. (FTNT). Below are the detailed ratings based on the latest assessments from reputable grading firms.
Cisco Systems, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Melius Research | maintain | Buy | 2025-11-13 |
| Morgan Stanley | maintain | Overweight | 2025-11-13 |
| B of A Securities | maintain | Buy | 2025-11-13 |
| Barclays | maintain | Equal Weight | 2025-11-13 |
| Citigroup | maintain | Buy | 2025-11-13 |
| Piper Sandler | maintain | Neutral | 2025-11-13 |
| JP Morgan | maintain | Overweight | 2025-11-13 |
| Keybanc | maintain | Overweight | 2025-11-13 |
| Rosenblatt | maintain | Buy | 2025-11-13 |
| Wells Fargo | 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 appears to maintain a strong position with consistent “Buy” and “Overweight” ratings from multiple analysts, suggesting confidence in its growth potential. In contrast, Fortinet’s ratings reflect a more cautious sentiment, with several firms maintaining “Hold” and “Neutral” stances, indicating a more tempered outlook on its performance.
Target Prices
The current consensus target prices for Cisco Systems, Inc. (CSCO) and Fortinet, Inc. (FTNT) suggest positive growth potential.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Cisco Systems, Inc. | 88 | 69 | 76.75 |
| Fortinet, Inc. | 110 | 67 | 88 |
For Cisco (CSCO), the target consensus of 76.75 is slightly below its current price of 77.01, indicating a cautious outlook. In contrast, Fortinet (FTNT) has a target consensus of 88, above its current price of 81.13, suggesting a more optimistic sentiment from analysts.
Strengths and Weaknesses
The following table outlines the key 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 | Moderate | High |
| Profitability | Good (Net Margin: 18%) | Very Good (Net Margin: 29%) |
| Innovation | Moderate | High |
| Global presence | Strong | Strong |
| Market Share | 7.5% | 3.5% |
| Debt level | Moderate (Debt/Equity: 0.63) | Low (Debt/Equity: 0.67) |
Key takeaways indicate that while both companies have strong global presence and profitability, Fortinet shows higher innovation and profit margins, making it a compelling option for investors seeking growth in the cybersecurity sector. Cisco has a more diversified portfolio but exhibits moderate innovation.
Risk Analysis
The following table outlines the key risks associated with Cisco Systems, Inc. (CSCO) and Fortinet, Inc. (FTNT).
| Metric | CSCO | FTNT |
|---|---|---|
| Market Risk | High | Medium |
| Regulatory Risk | Medium | High |
| Operational Risk | Medium | Medium |
| Environmental Risk | Low | Low |
| Geopolitical Risk | Medium | High |
Both companies face significant market risk, especially in the evolving technology sector. Fortinet, being in cybersecurity, has heightened regulatory risks due to increasing compliance demands. Meanwhile, geopolitical tensions can impact both firms, but particularly Fortinet, given its global operations and reliance on international markets.
Which one to choose?
When comparing Cisco Systems, Inc. (CSCO) and Fortinet, Inc. (FTNT), both companies exhibit strengths and weaknesses. CSCO boasts a market cap of 273B, with solid profitability metrics such as a net profit margin of 18% and an operating profit margin of 21%. Its stock has shown a bullish trend with a 53.6% price increase over the past year. However, the price-to-earnings ratio of 26.83 indicates it may be slightly overvalued.
On the other hand, FTNT, with a market cap of 72B, has a higher gross profit margin of 81% and a net profit margin of 29%. Despite its stock displaying a bullish trend with a 39% increase, it has a higher price-to-earnings ratio of 41.38, suggesting a premium valuation.
For growth-focused investors, FTNT may be preferable due to its higher margins and return on equity. Conversely, those prioritizing stability might lean towards CSCO with its more established market presence. Both companies face risks such as competition and market volatility.
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:
