NYSE:ANET, a strong growth stock, setting up for a breakout.

Last update: Apr 9, 2024

Growth investors are on the lookout for stocks displaying robust revenue and EPS growth. In this analysis, we'll assess whether ARISTA NETWORKS INC (NYSE:ANET) aligns with growth investing criteria, especially as it consolidates and signals a possible breakout. As always, investors should conduct their own research, but ARISTA NETWORKS INC has surfaced on our radar for growth with base formation, warranting further examination.

How We Gauge Growth for NYSE:ANET

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:ANET boasts a 8 out of 10:

ANET shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 51.09%, which is quite impressive.
The Earnings Per Share has been growing by 28.34% on average over the past years. This is a very strong growth
Looking at the last year, ANET shows a very strong growth in Revenue. The Revenue has grown by 33.75%.
ANET shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 22.19% yearly.
Based on estimates for the next years, ANET will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.46% on average per year.
The Revenue is expected to grow by 10.36% on average over the next years. This is quite good.

Health Assessment of NYSE:ANET

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:ANET has earned a 9 out of 10:

ANET has an Altman-Z score of 23.29. This indicates that ANET is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 23.29, ANET belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
ANET has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
ANET has a Current Ratio of 4.39. This indicates that ANET is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 4.39, ANET belongs to the top of the industry, outperforming 85.45% of the companies in the same industry.
A Quick Ratio of 3.31 indicates that ANET has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 3.31, ANET belongs to the top of the industry, outperforming 85.45% of the companies in the same industry.

Analyzing Profitability Metrics

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:ANET scores a 9 out of 10:

ANET has a better Return On Assets (20.98%) than 96.36% of its industry peers.
ANET has a better Return On Equity (28.91%) than 92.73% of its industry peers.
ANET's Return On Invested Capital of 24.11% is amongst the best of the industry. ANET outperforms 96.36% of its industry peers.
ANET had an Average Return On Invested Capital over the past 3 years of 21.73%. This is significantly above the industry average of 10.47%.
The last Return On Invested Capital (24.11%) for ANET is above the 3 year average (21.73%), which is a sign of increasing profitability.
ANET's Profit Margin of 35.62% is amongst the best of the industry. ANET outperforms 98.18% of its industry peers.
In the last couple of years the Profit Margin of ANET has grown nicely.
ANET's Operating Margin of 38.52% is amongst the best of the industry. ANET outperforms 100.00% of its industry peers.
ANET's Operating Margin has improved in the last couple of years.
ANET has a Gross Margin of 61.95%. This is amongst the best in the industry. ANET outperforms 87.27% of its industry peers.

How does the Setup look for NYSE:ANET

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, NYSE:ANET has a 7 as its setup rating, indicating its current consolidation status.

Besides having an excellent technical rating, ANET also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. A pullback is taking place, which may present a nice opportunity for an entry. There is a support zone below the current price at 295.49, a Stop Loss order could be placed below this zone.

Every day, new Strong Growth stocks can be found on ChartMill in our Strong Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of ANET

Check the latest full technical report of ANET for a complete technical analysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.