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%)
We assign a fundamental rating of 8 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 shows excellent growth, but is valued quite expensive already. 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.
- ANET had a positive operating cash flow in the past year.
- ANET had positive earnings in each of the past 5 years.
- ANET had a positive operating cash flow in each of the past 5 years.
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.
- The Return On Equity of ANET (28.19%) is better than 93.75% of its industry peers.
- ANET's Return On Invested Capital of 23.49% is amongst the best of the industry. ANET outperforms 97.92% of its industry peers.
- ANET had an Average Return On Invested Capital over the past 3 years of 23.71%. This 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
- ANET's Profit Margin of 39.73% 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.
- ANET has a better Operating Margin (42.88%) than 100.00% of its industry peers.
- ANET's Operating Margin has improved in the last couple of years.
- With an excellent Gross Margin value of 64.34%, ANET belongs to the best 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
- 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
- An Altman-Z score of 19.56 indicates that ANET is not in any danger for bankruptcy at the moment.
- The Altman-Z score of ANET (19.56) is better than 93.75% 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 | 19.56 |
ROIC/WACC2.46
WACC9.55%
2.3 Liquidity
- ANET has a Current Ratio of 3.25. This indicates that ANET is financially healthy and has no problem in meeting its short term obligations.
- ANET has a better Current ratio (3.25) than 83.33% of its industry peers.
- 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
- The Earnings Per Share has grown by an impressive 29.75% 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.
- 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
- ANET is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.87% yearly.
- Based on estimates for the next years, ANET will show a very strong growth in Revenue. The Revenue will grow by 21.06% on average per year.
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.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- ANET is valuated quite expensively with a Price/Earnings ratio of 49.04.
- ANET's Price/Earnings ratio is in line with the industry average.
- ANET is valuated expensively when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- A Price/Forward Earnings ratio of 39.96 indicates a quite expensive valuation of ANET.
- The rest of the industry has a similar Price/Forward Earnings ratio as ANET.
- 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
- ANET's Enterprise Value to EBITDA ratio is in line with the industry average.
- ANET's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.43 | ||
| EV/EBITDA | 42.41 |
4.3 Compensation for Growth
- ANET's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- 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 21.67% in the coming years.
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.