NYSE:ANET: a strong growth stock preparing for the next leg up?.

Last update: Aug 9, 2024

In this article we will dive into ARISTA NETWORKS INC (NYSE:ANET) as a possible candidate for growth investing. Investors should always do their own research, but we noticed ARISTA NETWORKS INC showing up in our strong growth, ready to breakout screen, which makes it worth to investigate a bit more.

Analyzing Growth Metrics

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:ANET was assigned a score of 8 for growth:

The Earnings Per Share has grown by an impressive 41.09% over the past year.
Measured over the past years, ANET shows a very strong growth in Earnings Per Share. The EPS has been growing by 28.34% on average per year.
The Revenue has grown by 19.93% in the past year. This is quite good.
Measured over the past years, ANET shows a very strong growth in Revenue. The Revenue has been growing by 22.19% on average per year.
The Earnings Per Share is expected to grow by 18.23% on average over the next years. This is quite good.
The Revenue is expected to grow by 17.26% on average over the next years. This is quite good.

Analyzing Health Metrics

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:ANET has achieved a 9 out of 10:

ANET has an Altman-Z score of 21.51. This indicates that ANET is financially healthy and has little risk of bankruptcy at the moment.
ANET has a Altman-Z score of 21.51. This is amongst the best in the industry. ANET outperforms 100.00% of its industry peers.
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 4.55. This indicates that ANET is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 4.55, ANET belongs to the best of the industry, outperforming 90.38% of the companies in the same industry.
A Quick Ratio of 3.70 indicates that ANET has no problem at all paying its short term obligations.
ANET has a Quick ratio of 3.70. This is amongst the best in the industry. ANET outperforms 90.38% of its industry peers.

Assessing Profitability for NYSE:ANET

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:

The Return On Assets of ANET (21.18%) is better than 98.08% of its industry peers.
ANET has a Return On Equity of 29.20%. This is amongst the best in the industry. ANET outperforms 96.15% of its industry peers.
The Return On Invested Capital of ANET (23.61%) is better than 96.15% 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 9.11%.
The last Return On Invested Capital (23.61%) for ANET is above the 3 year average (21.73%), which is a sign of increasing profitability.
The Profit Margin of ANET (39.01%) is better than 100.00% of its industry peers.
ANET's Profit Margin has improved in the last couple of years.
ANET has a better Operating Margin (41.23%) than 100.00% of its industry peers.
ANET's Operating Margin has improved in the last couple of years.
ANET's Gross Margin of 64.01% is amongst the best of the industry. ANET outperforms 86.54% of its industry peers.

Looking at the Setup

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NYSE:ANET this score is currently 7:

ANET has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately. There is very little resistance above the current price. There is a support zone below the current price at 319.20, a Stop Loss order could be placed below this zone.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

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

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

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.