ARISTA NETWORKS INC (ANET) Stock Fundamental Analysis
NYSE:ANET - New York Stock Exchange, Inc. - US0404132054 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to ANET. ANET was compared to 50 industry peers in the Communications Equipment industry. ANET has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. ANET is valued quite expensive, but it does show an excellent growth. These ratings would make ANET suitable 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.
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
The Return On Assets of ANET (20.86%) is better than 98.00% of its industry peers.
ANET's Return On Equity of 29.93% is amongst the best of the industry. ANET outperforms 94.00% of its industry peers.
The Return On Invested Capital of ANET (23.94%) is better than 98.00% 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 13.82%.
The 3 year average ROIC (23.71%) for ANET is below the current ROIC(23.94%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.86% | ||
| ROE | 29.93% | ||
| ROIC | 23.94% |
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
The Profit Margin of ANET (40.72%) is better than 100.00% of its industry peers.
ANET's Profit Margin has improved in the last couple of years.
ANET has a Operating Margin of 42.27%. This is amongst the best in the industry. ANET outperforms 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 64.09%, ANET belongs to the top of the industry, outperforming 88.00% 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 | 42.27% | ||
| PM (TTM) | 40.72% | ||
| GM | 64.09% |
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.
ANET has more shares outstanding than it did 1 year ago.
The number of shares outstanding for ANET has been increased compared to 5 years ago.
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
ANET has an Altman-Z score of 19.75. This indicates that ANET is financially healthy and has little risk of bankruptcy at the moment.
ANET's Altman-Z score of 19.75 is amongst the best of the industry. ANET outperforms 98.00% 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 19.75 |
ROIC/WACC2.37
WACC10.11%
2.3 Liquidity
ANET has a Current Ratio of 3.93. This indicates that ANET is financially healthy and has no problem in meeting its short term obligations.
ANET has a Current ratio of 3.93. This is amongst the best in the industry. ANET outperforms 82.00% of its industry peers.
A Quick Ratio of 3.31 indicates that ANET has no problem at all paying its short term obligations.
The Quick ratio of ANET (3.31) is better than 84.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.93 | ||
| Quick Ratio | 3.31 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 29.68% over the past year.
ANET shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 30.17% yearly.
The Revenue has grown by 22.31% in the past year. This is a very strong growth!
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)29.68%
EPS 3Y46.94%
EPS 5Y30.17%
EPS Q2Q%30.65%
Revenue 1Y (TTM)22.31%
Revenue growth 3Y33.43%
Revenue growth 5Y23.77%
Sales Q2Q%27.58%
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 16.25% yearly.
ANET is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 17.22% yearly.
EPS Next Y14.75%
EPS Next 2Y15.62%
EPS Next 3Y16.75%
EPS Next 5Y16.25%
Revenue Next Year19.93%
Revenue Next 2Y18.67%
Revenue Next 3Y18.09%
Revenue Next 5Y17.22%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 42.28, the valuation of ANET can be described as expensive.
ANET's Price/Earnings ratio is in line with the industry average.
ANET's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.15.
The Price/Forward Earnings ratio is 33.68, which means the current valuation is very expensive for ANET.
ANET's Price/Forward Earnings is on the same level as the industry average.
ANET's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 21.60.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.28 | ||
| Fwd PE | 33.68 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as ANET.
The rest of the industry has a similar Price/Free Cash Flow ratio as ANET.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.95 | ||
| EV/EBITDA | 34.45 |
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.
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 16.75% in the coming years.
PEG (NY)2.87
PEG (5Y)1.4
EPS Next 2Y15.62%
EPS Next 3Y16.75%
5. Dividend
5.1 Amount
No dividends for ANET!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
102.31
+2.92 (+2.94%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners69.58%
Inst Owner Change4.92%
Ins Owners3.36%
Ins Owner Change0.92%
Market Cap128.49B
Analysts81.94
Price Target107.09 (4.67%)
Short Float %2.08%
Short Ratio1.98
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)9.9%
Min EPS beat(2)7.74%
Max EPS beat(2)12.07%
EPS beat(4)4
Avg EPS beat(4)9.62%
Min EPS beat(4)5.76%
Max EPS beat(4)12.91%
EPS beat(8)8
Avg EPS beat(8)11.44%
EPS beat(12)12
Avg EPS beat(12)11.95%
EPS beat(16)16
Avg EPS beat(16)10.39%
Revenue beat(2)0
Avg Revenue beat(2)-0.43%
Min Revenue beat(2)-0.6%
Max Revenue beat(2)-0.26%
Revenue beat(4)2
Avg Revenue beat(4)0.33%
Min Revenue beat(4)-0.6%
Max Revenue beat(4)1.85%
Revenue beat(8)4
Avg Revenue beat(8)0.39%
Revenue beat(12)8
Avg Revenue beat(12)1.94%
Revenue beat(16)11
Avg Revenue beat(16)1.66%
PT rev (1m)-2.07%
PT rev (3m)-9.61%
EPS NQ rev (1m)0%
EPS NQ rev (3m)7.31%
EPS NY rev (1m)0.18%
EPS NY rev (3m)2.55%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)4.22%
Revenue NY rev (1m)0.11%
Revenue NY rev (3m)0.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.28 | ||
| Fwd PE | 33.68 | ||
| P/S | 17.28 | ||
| P/FCF | 33.95 | ||
| P/OCF | 33.5 | ||
| P/B | 12.7 | ||
| P/tB | 13.12 | ||
| EV/EBITDA | 34.45 |
EPS(TTM)2.42
EY2.37%
EPS(NY)3.04
Fwd EY2.97%
FCF(TTM)3.01
FCFY2.95%
OCF(TTM)3.05
OCFY2.99%
SpS5.92
BVpS8.06
TBVpS7.8
PEG (NY)2.87
PEG (5Y)1.4
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.86% | ||
| ROE | 29.93% | ||
| ROCE | 27.59% | ||
| ROIC | 23.94% | ||
| ROICexc | 84.09% | ||
| ROICexgc | 93.45% | ||
| OM | 42.27% | ||
| PM (TTM) | 40.72% | ||
| GM | 64.09% | ||
| FCFM | 50.9% |
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%
ROICexcg growth 3Y3.57%
ROICexcg 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 Turnover0.51
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 84.75% | ||
| Cap/Sales | 0.69% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 119.75% | ||
| Profit Quality | 125% | ||
| Current Ratio | 3.93 | ||
| Quick Ratio | 3.31 | ||
| Altman-Z | 19.75 |
F-Score6
WACC10.11%
ROIC/WACC2.37
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)29.68%
EPS 3Y46.94%
EPS 5Y30.17%
EPS Q2Q%30.65%
EPS Next Y14.75%
EPS Next 2Y15.62%
EPS Next 3Y16.75%
EPS Next 5Y16.25%
Revenue 1Y (TTM)22.31%
Revenue growth 3Y33.43%
Revenue growth 5Y23.77%
Sales Q2Q%27.58%
Revenue Next Year19.93%
Revenue Next 2Y18.67%
Revenue Next 3Y18.09%
Revenue Next 5Y17.22%
EBIT growth 1Y29.2%
EBIT growth 3Y47.12%
EBIT growth 5Y29.59%
EBIT Next Year18.97%
EBIT Next 3Y17.52%
EBIT Next 5YN/A
FCF growth 1Y515.7%
FCF growth 3Y56.94%
FCF growth 5Y31.15%
OCF growth 1Y490.03%
OCF growth 3Y53.97%
OCF growth 5Y30.95%