ARISTA NETWORKS INC (ANET) Stock Fundamental Analysis
USA - NYSE:ANET - US0404132054 - Common Stock
140.42 USD
-13.13 (-8.55%)
141 USD
+0.58 (+0.41%)
We assign a fundamental rating of 7 out of 10 to ANET. ANET was compared to 48 industry peers in the Communications Equipment industry. Both the health and profitability get an excellent rating, making ANET a very profitable company, without any liquidiy or solvency issues. ANET is valued quite expensive, but it does show an excellent growth. With these ratings, ANET could be worth investigating further for growth and quality investing!.
1. Profitability
1.1 Basic Checks
ANET had positive earnings in the past year.
In the past year ANET had a positive cash flow from operations.
Each year in the past 5 years ANET has been profitable.
Each year in the past 5 years ANET had a positive operating cash flow.
1.2 Ratios
ANET's Return On Assets of 19.67% is amongst the best of the industry. ANET outperforms 95.83% of its industry peers.
Looking at the Return On Equity, with a value of 29.83%, ANET belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.
ANET's Return On Invested Capital of 23.84% is amongst the best of the industry. ANET outperforms 97.92% 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 13.02%.
The 3 year average ROIC (23.71%) for ANET is below the current ROIC(23.84%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.67% | ||
| ROE | 29.83% | ||
| ROIC | 23.84% |
ROA(3y)20.41%
ROA(5y)17.86%
ROE(3y)28.38%
ROE(5y)25.08%
ROIC(3y)23.71%
ROIC(5y)20.75%
1.3 Margins
Looking at the Profit Margin, with a value of 40.89%, ANET belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
ANET's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 43.14%, ANET belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Operating Margin of ANET has grown nicely.
ANET has a Gross Margin of 64.24%. This is amongst the best in the industry. ANET outperforms 87.50% of its industry peers.
In the last couple of years the Gross Margin of ANET has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 43.14% | ||
| PM (TTM) | 40.89% | ||
| GM | 64.24% |
OM growth 3Y10.26%
OM growth 5Y4.7%
PM growth 3Y12.61%
PM growth 5Y2.7%
GM growth 3Y0.17%
GM growth 5Y0.02%
2. Health
2.1 Basic Checks
ANET has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for ANET has been increased compared to 1 year ago.
ANET has more shares outstanding than it did 5 years ago.
ANET has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 23.11 indicates that ANET is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 23.11, ANET belongs to the top of the industry, outperforming 95.83% of the companies in the same industry.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 23.11 |
ROIC/WACC2.62
WACC9.09%
2.3 Liquidity
A Current Ratio of 3.33 indicates that ANET has no problem at all paying its short term obligations.
ANET has a Current ratio of 3.33. This is amongst the best in the industry. ANET outperforms 81.25% of its industry peers.
ANET has a Quick Ratio of 2.82. This indicates that ANET is financially healthy and has no problem in meeting its short term obligations.
With a decent Quick ratio value of 2.82, ANET is doing good in the industry, outperforming 79.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.33 | ||
| Quick Ratio | 2.82 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 29.75% 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 30.17% on average per year.
The Revenue has grown by 19.50% in the past year. This is quite good.
The Revenue has been growing by 23.77% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)29.75%
EPS 3Y46.94%
EPS 5Y30.17%
EPS Q2Q%25%
Revenue 1Y (TTM)19.5%
Revenue growth 3Y33.43%
Revenue growth 5Y23.77%
Sales Q2Q%27.46%
3.2 Future
ANET is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.41% yearly.
The Revenue is expected to grow by 19.59% on average over the next years. This is quite good.
EPS Next Y26.16%
EPS Next 2Y21.42%
EPS Next 3Y20.92%
EPS Next 5Y19.42%
Revenue Next Year25.2%
Revenue Next 2Y22.94%
Revenue Next 3Y21.75%
Revenue Next 5Y19.59%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 50.51, ANET can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of ANET is on the same level as its industry peers.
When comparing the Price/Earnings ratio of ANET to the average of the S&P500 Index (26.13), we can say ANET is valued expensively.
ANET is valuated quite expensively with a Price/Forward Earnings ratio of 41.91.
ANET's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of ANET to the average of the S&P500 Index (22.35), we can say ANET is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 50.51 | ||
| Fwd PE | 41.91 |
4.2 Price Multiples
ANET's Enterprise Value to EBITDA ratio is in line with the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as ANET.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.4 | ||
| EV/EBITDA | 50.91 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ANET does not grow enough to justify the current Price/Earnings ratio.
ANET has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as ANET's earnings are expected to grow with 20.92% in the coming years.
PEG (NY)1.93
PEG (5Y)1.67
EPS Next 2Y21.42%
EPS Next 3Y20.92%
5. Dividend
5.1 Amount
ANET does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
140.42
-13.13 (-8.55%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners69.05%
Inst Owner Change0.31%
Ins Owners3.35%
Ins Owner Change-0.68%
Market Cap176.49B
Revenue(TTM)7.00B
Net Income(TTM)3.25B
Analysts82.42
Price Target163.07 (16.13%)
Short Float %1.24%
Short Ratio1.5
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.98%
Min EPS beat(2)7.74%
Max EPS beat(2)10.22%
EPS beat(4)4
Avg EPS beat(4)10.73%
Min EPS beat(4)7.74%
Max EPS beat(4)12.91%
EPS beat(8)8
Avg EPS beat(8)11.75%
EPS beat(12)12
Avg EPS beat(12)11.47%
EPS beat(16)16
Avg EPS beat(16)10.73%
Revenue beat(2)1
Avg Revenue beat(2)1.15%
Min Revenue beat(2)-0.26%
Max Revenue beat(2)2.55%
Revenue beat(4)2
Avg Revenue beat(4)0.89%
Min Revenue beat(4)-0.6%
Max Revenue beat(4)2.55%
Revenue beat(8)4
Avg Revenue beat(8)0.24%
Revenue beat(12)8
Avg Revenue beat(12)1.68%
Revenue beat(16)11
Avg Revenue beat(16)1.77%
PT rev (1m)9.17%
PT rev (3m)47.68%
EPS NQ rev (1m)0.16%
EPS NQ rev (3m)14.07%
EPS NY rev (1m)0.07%
EPS NY rev (3m)9.57%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)6.39%
Revenue NY rev (1m)0%
Revenue NY rev (3m)4.21%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 50.51 | ||
| Fwd PE | 41.91 | ||
| P/S | 22.2 | ||
| P/FCF | 44.4 | ||
| P/OCF | 43.61 | ||
| P/B | 16.19 | ||
| P/tB | 16.83 | ||
| EV/EBITDA | 50.91 |
EPS(TTM)2.78
EY1.98%
EPS(NY)3.35
Fwd EY2.39%
FCF(TTM)3.16
FCFY2.25%
OCF(TTM)3.22
OCFY2.29%
SpS6.33
BVpS8.67
TBVpS8.34
PEG (NY)1.93
PEG (5Y)1.67
Graham Number23.29
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.67% | ||
| ROE | 29.83% | ||
| ROCE | 27.48% | ||
| ROIC | 23.84% | ||
| ROICexc | 81.79% | ||
| ROICexgc | 92.37% | ||
| OM | 43.14% | ||
| PM (TTM) | 40.89% | ||
| GM | 64.24% | ||
| FCFM | 50% |
ROA(3y)20.41%
ROA(5y)17.86%
ROE(3y)28.38%
ROE(5y)25.08%
ROIC(3y)23.71%
ROIC(5y)20.75%
ROICexc(3y)67.83%
ROICexc(5y)64.95%
ROICexgc(3y)77.58%
ROICexgc(5y)79.18%
ROCE(3y)27.32%
ROCE(5y)23.92%
ROICexgc growth 3Y3.57%
ROICexgc growth 5Y0.83%
ROICexc growth 3Y8.79%
ROICexc growth 5Y0.97%
OM growth 3Y10.26%
OM growth 5Y4.7%
PM growth 3Y12.61%
PM growth 5Y2.7%
GM growth 3Y0.17%
GM growth 5Y0.02%
F-Score6
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 124.95% | ||
| Cap/Sales | 0.9% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 116.05% | ||
| Profit Quality | 122.26% | ||
| Current Ratio | 3.33 | ||
| Quick Ratio | 2.82 | ||
| Altman-Z | 23.11 |
F-Score6
WACC9.09%
ROIC/WACC2.62
Cap/Depr(3y)57.2%
Cap/Depr(5y)66.94%
Cap/Sales(3y)0.69%
Cap/Sales(5y)0.98%
Profit Quality(3y)85.94%
Profit Quality(5y)96.87%
High Growth Momentum
Growth
EPS 1Y (TTM)29.75%
EPS 3Y46.94%
EPS 5Y30.17%
EPS Q2Q%25%
EPS Next Y26.16%
EPS Next 2Y21.42%
EPS Next 3Y20.92%
EPS Next 5Y19.42%
Revenue 1Y (TTM)19.5%
Revenue growth 3Y33.43%
Revenue growth 5Y23.77%
Sales Q2Q%27.46%
Revenue Next Year25.2%
Revenue Next 2Y22.94%
Revenue Next 3Y21.75%
Revenue Next 5Y19.59%
EBIT growth 1Y31.8%
EBIT growth 3Y47.12%
EBIT growth 5Y29.59%
EBIT Next Year29.88%
EBIT Next 3Y22%
EBIT Next 5Y20.74%
FCF growth 1Y320.65%
FCF growth 3Y56.94%
FCF growth 5Y31.15%
OCF growth 1Y311.66%
OCF growth 3Y53.97%
OCF growth 5Y30.95%
ARISTA NETWORKS INC / ANET FAQ
What is the ChartMill fundamental rating of ARISTA NETWORKS INC (ANET) stock?
ChartMill assigns a fundamental rating of 7 / 10 to ANET.
What is the valuation status for ANET stock?
ChartMill assigns a valuation rating of 3 / 10 to ARISTA NETWORKS INC (ANET). This can be considered as Overvalued.
What is the profitability of ANET stock?
ARISTA NETWORKS INC (ANET) has a profitability rating of 9 / 10.
How financially healthy is ARISTA NETWORKS INC?
The financial health rating of ARISTA NETWORKS INC (ANET) is 9 / 10.
What is the earnings growth outlook for ARISTA NETWORKS INC?
The Earnings per Share (EPS) of ARISTA NETWORKS INC (ANET) is expected to grow by 26.16% in the next year.