ANET gets a fundamental rating of 8 out of 10. The analysis compared the fundamentals against 48 industry peers in the Communications Equipment industry. ANET scores excellent points on both the profitability and health parts. This is a solid base for a good stock. ANET is valued quite expensively, but it does show have an excellent growth rating. With these ratings, ANET could be worth investigating further for growth and quality investing!.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

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.
ANET had positive earnings in each of the past 5 years.
Each year in the past 5 years ANET had a positive operating cash flow.

1.2 Ratios

With an excellent Return On Assets value of 18.60%, ANET belongs to the best of the industry, outperforming 95.83% of the companies in the same industry.
ANET's Return On Equity of 28.19% is amongst the best of the industry. ANET outperforms 93.75% of its industry peers.
Looking at the Return On Invested Capital, with a value of 23.49%, ANET belongs to the top of the industry, outperforming 97.92% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ANET is significantly above the industry average of 12.17%.

		Industry Rank	Sector Rank
ROA	18.6%
ROE	28.19%
ROIC	23.49%

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

ANET has a better Profit Margin (39.73%) than 100.00% of its industry peers.
ANET's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 42.88%, ANET belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
ANET's Operating Margin has improved in the last couple of years.
ANET has a Gross Margin of 64.34%. This is amongst the best in the industry. ANET outperforms 85.42% of its industry peers.
ANET's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	42.88%
PM (TTM)	39.73%
GM	64.34%

OM growth 3Y10.26%

OM growth 5Y4.7%

PM growth 3Y12.61%

PM growth 5Y2.7%

GM growth 3Y0.17%

GM growth 5Y0.02%

More info and screens

ROA

ROE

ROIC

Operating and Profit Margin

Show most profitable peers

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.
Compared to 5 years ago, ANET has more shares outstanding
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.

2.2 Solvency

An Altman-Z score of 20.76 indicates that ANET is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 20.76, ANET belongs to the best of the industry, outperforming 91.67% 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	20.76

ROIC/WACC2.36

WACC9.94%

2.3 Liquidity

A Current Ratio of 3.25 indicates that ANET has no problem at all paying its short term obligations.
With an excellent Current ratio value of 3.25, ANET belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
ANET has a Quick Ratio of 2.79. This indicates that ANET is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of ANET (2.79) is better than 81.25% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	3.25
Quick Ratio	2.79

More info and screens

WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

Show peers with great health

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 27.75% in the past year. This is a very strong growth!
ANET shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 23.77% yearly.

EPS 1Y (TTM)29.75%

EPS 3Y46.94%

EPS 5Y30.17%

EPS Q2Q%25%

Revenue 1Y (TTM)27.75%

Revenue growth 3Y33.43%

Revenue growth 5Y23.77%

Sales Q2Q%27.46%

3.2 Future

Based on estimates for the next years, ANET will show a very strong growth in Earnings Per Share. The EPS will grow by 21.87% on average per year.
The Revenue is expected to grow by 21.06% on average over the next years. This is a very strong growth

EPS Next Y28.73%

EPS Next 2Y22.53%

EPS Next 3Y21.67%

EPS Next 5Y21.87%

Revenue Next Year27.41%

Revenue Next 2Y24.57%

Revenue Next 3Y22.94%

Revenue Next 5Y21.06%

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.

More info and screens

Find the best growth stocks

Show best growing peers

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 50.99, which means the current valuation is very expensive for ANET.
The rest of the industry has a similar Price/Earnings ratio as ANET.
When comparing the Price/Earnings ratio of ANET to the average of the S&P500 Index (28.30), we can say ANET is valued expensively.
The Price/Forward Earnings ratio is 41.54, which means the current valuation is very expensive for ANET.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ANET is on the same level as its industry peers.
ANET is valuated expensively when we compare the Price/Forward Earnings ratio to 25.57, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	50.99
Fwd PE	41.54

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as ANET.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ANET is on the same level as its industry peers.

		Industry Rank	Sector Rank
P/FCF	44.12
EV/EBITDA	45.74

4.3 Compensation for Growth

ANET's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of ANET may justify a higher PE ratio.
ANET's earnings are expected to grow with 21.67% in the coming years. This may justify a more expensive valuation.