In a market where value is scarce, NYSE:ANET offers a refreshing opportunity with its solid fundamentals.

Last update: Dec 6, 2024

Our stock screener has spotted ARISTA NETWORKS INC (NYSE:ANET) as an undervalued stock with solid fundamentals. NYSE:ANET shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Deciphering NYSE:ANET's Valuation Rating

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:

88.24% of the companies in the same industry are more expensive than ANET, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of ANET to the average of the S&P500 Index (29.42), we can say ANET is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 10.71, the valuation of ANET can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ANET indicates a rather cheap valuation: ANET is cheaper than 88.24% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of ANET to the average of the S&P500 Index (23.93), we can say ANET is valued rather cheaply.
ANET's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ANET is cheaper than 86.27% of the companies in the same industry.
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.
ANET's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ANET has an outstanding profitability rating, which may justify a higher PE ratio.
ANET's earnings are expected to grow with 19.06% in the coming years. This may justify a more expensive valuation.

Profitability Assessment of NYSE:ANET

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:ANET has earned a 9 out of 10:

ANET has a Return On Assets of 20.74%. This is amongst the best in the industry. ANET outperforms 98.04% of its industry peers.
ANET has a better Return On Equity (28.82%) than 96.08% of its industry peers.
ANET has a better Return On Invested Capital (22.96%) than 94.12% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ANET is significantly above the industry average of 10.84%.
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's Profit Margin of 40.29% is amongst the best of the industry. ANET outperforms 100.00% of its industry peers.
ANET's Profit Margin has improved in the last couple of years.
The Operating Margin of ANET (42.11%) is better than 100.00% of its industry peers.
In the last couple of years the Operating Margin of ANET has grown nicely.
Looking at the Gross Margin, with a value of 64.41%, ANET belongs to the top of the industry, outperforming 88.24% of the companies in the same industry.

Understanding NYSE:ANET's Health Score

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:ANET scores a 9 out of 10:

An Altman-Z score of 8.37 indicates that ANET is not in any danger for bankruptcy at the moment.
ANET has a better Altman-Z score (8.37) than 94.12% of its industry peers.
There is no outstanding debt for ANET. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
ANET has a Current Ratio of 4.47. This indicates that ANET is financially healthy and has no problem in meeting its short term obligations.
ANET's Current ratio of 4.47 is amongst the best of the industry. ANET outperforms 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.
Looking at the Quick ratio, with a value of 3.69, ANET belongs to the top of the industry, outperforming 90.20% of the companies in the same industry.

Growth Assessment of NYSE:ANET

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:ANET has achieved a 8 out of 10:

The Earnings Per Share has grown by an impressive 37.12% over the past year.
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 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.
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.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Our latest full fundamental report of ANET contains the most current fundamental analsysis.

Disclaimer

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.