Head to Head Comparison: Cisco Systems (NASDAQ:CSCO) & ADTRAN (NASDAQ:ADTN)

ADTRAN (NASDAQ:ADTN) and Cisco Systems (NASDAQ:CSCO) are both technology companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, valuation, analyst recommendations, risk, earnings, dividends and institutional ownership.

Profitability

This table compares ADTRAN and Cisco Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ADTRAN	-2.29%	14.24%	1.66%
Cisco Systems	20.95%	30.16%	11.69%

Insider and Institutional Ownership

80.6% of ADTRAN shares are held by institutional investors. Comparatively, 73.3% of Cisco Systems shares are held by institutional investors. 2.2% of ADTRAN shares are held by company insiders. Comparatively, 0.0% of Cisco Systems shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

ADTRAN has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500. Comparatively, Cisco Systems has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for ADTRAN and Cisco Systems, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ADTRAN	2	1	4	0	2.29
Cisco Systems	0	7	15	2	2.79

ADTRAN currently has a consensus target price of $14.67, suggesting a potential upside of 88.76%. Cisco Systems has a consensus target price of $129.43, suggesting a potential upside of 16.56%. Given ADTRAN’s higher probable upside, analysts plainly believe ADTRAN is more favorable than Cisco Systems.

Valuation and Earnings

This table compares ADTRAN and Cisco Systems”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ADTRAN	$1.08 billion	0.58	-$45.66 million	($0.28)	-27.75
Cisco Systems	$63.33 billion	6.91	$13.27 billion	$3.34	33.25

Cisco Systems has higher revenue and earnings than ADTRAN. ADTRAN is trading at a lower price-to-earnings ratio than Cisco Systems, indicating that it is currently the more affordable of the two stocks.

Summary

Cisco Systems beats ADTRAN on 11 of the 15 factors compared between the two stocks.

About ADTRAN

ADTRAN Holdings, Inc., through its subsidiaries, provides networking and communications platforms, software, systems, and services in the United States, Germany, the United Kingdom, and internationally. It operates through two segments, Network Solutions, and Services & Support. It offers residential gateways; ethernet passive optical network ONUs; gigabit passive optical network/XGS-PON ONTs; traditional SSE, routers, and switches; edge cloud; carrier ethernet network interface devices; Optical Line Terminals; Packet Aggregation, Copper Access, and Oscilloquartz; optical transport and engine solutions; infrastructure monitoring solution; and training, professional, software, and managed services. The company also provides various software, such as Mosaic One SaaS, n-Command, Procloud, MCP, AOE and ACI-E, and Ensemble Controller. It serves large, medium, and small service providers; alternative service providers, such as utilities, municipalities and fiber overbuilders; cable/MSOs; and SMBs and distributed enterprises. ADTRAN Holdings, Inc. was incorporated in 1985 and is headquartered in Huntsville, Alabama.

About Cisco Systems

Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol based networking and other products related to the communications and information technology industry in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and China. The company also offers switching portfolio encompasses campus switching as well as data center switching; enterprise routing portfolio interconnects public and private wireline and mobile networks, delivering highly secure, and reliable connectivity to campus, data center and branch networks; wireless products include wireless access points and controllers; and compute portfolio including the cisco unified computing system, hyperflex, and software management capabilities, which combine computing, networking, and storage infrastructure management and virtualization. In addition, it provides Internet for the future product consists of routed optical networking, 5G, silicon, and optics solutions; collaboration products, such as meetings, collaboration devices, calling, contact center, and communication platform as a service; end-to-end security product consists of network security, cloud security, security endpoints, unified threat management, and zero trust; and optimized application experiences products including full stack observability and network assurance. Further, the company offers a range of service and support options for its customers, including technical support and advanced services and advisory services. It serves businesses of various sizes, public institutions, governments, and service providers. The company sells its products and services directly, as well as through systems integrators, service providers, other resellers, and distributors. Cisco Systems, Inc. has strategic alliances with other companies. Cisco Systems, Inc. was incorporated in 1984 and is headquartered in San Jose, California.