ARISTA NETWORKS INC (ANET) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ANET - US0404132054 - Common Stock
136.34 USD
-2.07 (-1.5%)
136.423 USD
+0.08 (+0.06%)
Taking everything into account, ANET scores 8 out of 10 in our fundamental rating. ANET was compared to 49 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 expensively, but it does show have an excellent growth rating. These ratings could make ANET a good candidate for growth and quality investing.
1. Profitability
1.1 Basic Checks
- In the past year ANET was profitable.
- 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 18.60% is amongst the best of the industry. ANET outperforms 95.83% of its industry peers.
- 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 12.15%.
| 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
- Looking at the Profit Margin, with a value of 39.73%, ANET belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
- In the last couple of years the Profit Margin of ANET has grown nicely.
- With an excellent Operating Margin value of 42.88%, ANET belongs to the best 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.
- Looking at the Gross Margin, with a value of 64.34%, ANET belongs to the top of the industry, outperforming 85.42% of the companies in the same industry.
- 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 | 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%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ANET is creating value.
- Compared to 1 year ago, ANET has more shares outstanding
- 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
- ANET has an Altman-Z score of 19.56. This indicates that ANET is financially healthy and has little risk of bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 19.56, ANET belongs to the top of the industry, outperforming 93.75% 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 | 19.56 |
ROIC/WACC2.46
WACC9.55%
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.
- A Quick Ratio of 2.79 indicates that ANET has no problem at all paying its short term obligations.
- ANET's Quick ratio of 2.79 is amongst the best of the industry. ANET outperforms 81.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.25 | ||
| Quick Ratio | 2.79 |
3. Growth
3.1 Past
- ANET shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 29.75%, which is quite impressive.
- ANET shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 30.17% yearly.
- ANET shows a strong growth in Revenue. In the last year, the Revenue has grown by 27.75%.
- Measured over the past years, ANET shows a very strong growth in Revenue. The Revenue has been growing by 23.77% on average per year.
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
- The Earnings Per Share is expected to grow by 21.87% on average over the next years. This is a very strong growth
- 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.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 49.04, the valuation of ANET can be described as expensive.
- Compared to the rest of the industry, the Price/Earnings ratio of ANET is on the same level as its industry peers.
- ANET's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.21.
- A Price/Forward Earnings ratio of 39.96 indicates a quite expensive valuation of ANET.
- ANET's Price/Forward Earnings ratio is in line with the industry average.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.26, ANET is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.04 | ||
| Fwd PE | 39.96 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ANET is on the same level as its industry peers.
- ANET's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.43 | ||
| EV/EBITDA | 42.41 |
4.3 Compensation for Growth
- The 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.
PEG (NY)1.71
PEG (5Y)1.63
EPS Next 2Y22.53%
EPS Next 3Y21.67%
5. Dividend
5.1 Amount
- ANET does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
ARISTA NETWORKS INC / ANET FAQ
What is the ChartMill fundamental rating of ARISTA NETWORKS INC (ANET) stock?
ChartMill assigns a fundamental rating of 8 / 10 to ANET.
What is the valuation status of ARISTA NETWORKS INC (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.
What is the expected EPS growth for ARISTA NETWORKS INC (ANET) stock?
The Earnings per Share (EPS) of ARISTA NETWORKS INC (ANET) is expected to grow by 28.73% in the next year.