NYSE:ANET is showing decent growth, but is still valued reasonably.

Last update: Dec 5, 2024

Consider ARISTA NETWORKS INC (NYSE:ANET) as an affordable growth stock, identified by our stock screening tool. NYSE:ANET is showcasing impressive growth figures and is well-positioned in terms of profitability, solvency, and liquidity. Moreover, it seems to be priced reasonably. Let's dive deeper into the analysis.

Looking at the Growth

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:

ANET shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 37.12%, which is quite impressive.
ANET shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 28.34% yearly.
Looking at the last year, ANET shows a quite strong growth in Revenue. The Revenue has grown by 18.19% in the last year.
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 18.23% on average per year.
The Revenue is expected to grow by 17.26% on average over the next years. This is quite good.

Exploring NYSE:ANET's Valuation

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:ANET boasts a 9 out of 10:

Compared to the rest of the industry, the Price/Earnings ratio of ANET indicates a rather cheap valuation: ANET is cheaper than 88.24% of the companies listed in the same industry.
ANET is valuated cheaply when we compare the Price/Earnings ratio to 29.59, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 10.57 indicates a reasonable valuation of ANET.
88.24% of the companies in the same industry are more expensive than ANET, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 24.06. ANET is valued rather cheaply when compared to this.
84.31% of the companies in the same industry are more expensive than ANET, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ANET indicates a rather cheap valuation: ANET is cheaper than 84.31% of the companies listed in the same industry.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of ANET may justify a higher PE ratio.
A more expensive valuation may be justified as ANET's earnings are expected to grow with 19.06% in the coming years.

Deciphering NYSE:ANET's Health Rating

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:

An Altman-Z score of 8.30 indicates that ANET is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 8.30, ANET belongs to the top of the industry, outperforming 94.12% 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.
A Current Ratio of 4.47 indicates that ANET has no problem at all paying its short term obligations.
ANET has a better Current ratio (4.47) than 86.27% of its industry peers.
A Quick Ratio of 3.69 indicates that ANET has no problem at all paying its short term obligations.
With an excellent Quick ratio value of 3.69, ANET belongs to the best of the industry, outperforming 90.20% of the companies in the same industry.

Profitability Insights: 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:

ANET has a better Return On Assets (20.74%) than 98.04% of its industry peers.
ANET's Return On Equity of 28.82% is amongst the best of the industry. ANET outperforms 96.08% of its industry peers.
ANET's Return On Invested Capital of 22.96% is amongst the best of the industry. ANET outperforms 94.12% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ANET is significantly above the industry average of 10.38%.
The last Return On Invested Capital (22.96%) for ANET is above the 3 year average (21.73%), which is a sign of increasing profitability.
ANET has a better Profit Margin (40.29%) than 100.00% of its industry peers.
In the last couple of years the Profit Margin of ANET has grown nicely.
ANET's Operating Margin of 42.11% 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 64.41%. This is amongst the best in the industry. ANET outperforms 88.24% of its industry peers.

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

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

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.