ARISTA NETWORKS INC (ANET) Stock Fundamental Analysis
NYSE:ANET - New York Stock Exchange, Inc. - US0404131064 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to ANET. ANET was compared to 51 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 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.
ANET had a positive operating cash flow in the past year.
In the past 5 years ANET has always 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 20.74% is amongst the best of the industry. ANET outperforms 98.00% of its industry peers.
The Return On Equity of ANET (28.82%) is better than 96.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 22.96%, ANET belongs to the top of the industry, outperforming 96.00% of the companies in the same industry.
ANET had an Average Return On Invested Capital over the past 3 years of 21.73%. This is significantly above the industry average of 11.66%.
The 3 year average ROIC (21.73%) for ANET is below the current ROIC(22.96%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.74% | ||
| ROE | 28.82% | ||
| ROIC | 22.96% |
ROA(3y)18.54%
ROA(5y)17.91%
ROE(3y)25.91%
ROE(5y)25.31%
ROIC(3y)21.73%
ROIC(5y)19.92%
1.3 Margins
ANET has a better Profit Margin (40.29%) than 100.00% of its industry peers.
ANET's Profit Margin has improved in the last couple of years.
The Operating Margin of ANET (42.11%) is better than 100.00% of its industry peers.
ANET's Operating Margin has improved in the last couple of years.
ANET has a better Gross Margin (64.41%) than 88.00% of its industry peers.
ANET's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 42.11% | ||
| PM (TTM) | 40.29% | ||
| GM | 64.41% |
OM growth 3Y8.46%
OM growth 5Y4.08%
PM growth 3Y9.16%
PM growth 5Y18.5%
GM growth 3Y-1.05%
GM growth 5Y-0.6%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ANET is creating value.
Compared to 1 year ago, ANET has more shares outstanding
Compared to 5 years ago, ANET has more shares outstanding
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 24.47. This indicates that ANET is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ANET (24.47) is better than 100.00% of its industry peers.
ANET has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 24.47 |
ROIC/WACC2.44
WACC9.41%
2.3 Liquidity
ANET has a Current Ratio of 4.47. This indicates that ANET is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 4.47, ANET belongs to the best of the industry, outperforming 88.00% of the companies in the same industry.
ANET has a Quick Ratio of 3.69. This indicates that ANET is financially healthy and has no problem in meeting its short term obligations.
ANET has a better Quick ratio (3.69) than 92.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.47 | ||
| Quick Ratio | 3.69 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 37.12% over the past year.
The Earnings Per Share has been growing by 28.34% on average over the past years. This is a very strong growth
Looking at the last year, ANET shows a quite strong growth in Revenue. The Revenue has grown by 18.19% in the last year.
ANET shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 22.19% yearly.
EPS 1Y (TTM)37.12%
EPS 3Y45.21%
EPS 5Y28.34%
EPS Q2Q%31.15%
Revenue 1Y (TTM)18.19%
Revenue growth 3Y36.24%
Revenue growth 5Y22.19%
Sales Q2Q%19.97%
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 18.81% yearly.
Based on estimates for the next years, ANET will show a quite strong growth in Revenue. The Revenue will grow by 17.90% on average per year.
EPS Next Y29.39%
EPS Next 2Y20.61%
EPS Next 3Y19.42%
EPS Next 5Y18.81%
Revenue Next Year19.12%
Revenue Next 2Y18.99%
Revenue Next 3Y18.34%
Revenue Next 5Y17.9%
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 45.93, the valuation of ANET can be described as expensive.
ANET's Price/Earnings is on the same level as the industry average.
ANET is valuated expensively when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 39.06, ANET can be considered very expensive at the moment.
ANET's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of ANET to the average of the S&P500 Index (22.68), we can say ANET is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.93 | ||
| Fwd PE | 39.06 |
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 | 38.96 | ||
| EV/EBITDA | 41.67 |
4.3 Compensation for Growth
The 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.
ANET's earnings are expected to grow with 19.42% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.56
PEG (5Y)1.62
EPS Next 2Y20.61%
EPS Next 3Y19.42%
5. Dividend
5.1 Amount
No dividends for ANET!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
98.3
-5.1 (-4.93%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners70.76%
Inst Owner Change282.05%
Ins Owners3.55%
Ins Owner Change-0.21%
Market Cap123.83B
Analysts81.29
Price Target116.1 (18.11%)
Short Float %0.96%
Short Ratio1.28
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)9.34%
Min EPS beat(2)5.76%
Max EPS beat(2)12.91%
EPS beat(4)4
Avg EPS beat(4)12.62%
Min EPS beat(4)5.76%
Max EPS beat(4)19.75%
EPS beat(8)8
Avg EPS beat(8)11.26%
EPS beat(12)12
Avg EPS beat(12)11.27%
EPS beat(16)16
Avg EPS beat(16)9.47%
Revenue beat(2)2
Avg Revenue beat(2)1.09%
Min Revenue beat(2)0.32%
Max Revenue beat(2)1.85%
Revenue beat(4)2
Avg Revenue beat(4)0.05%
Min Revenue beat(4)-1.44%
Max Revenue beat(4)1.85%
Revenue beat(8)6
Avg Revenue beat(8)1.19%
Revenue beat(12)10
Avg Revenue beat(12)2.27%
Revenue beat(16)13
Avg Revenue beat(16)1.9%
PT rev (1m)5.45%
PT rev (3m)-69.66%
EPS NQ rev (1m)0.47%
EPS NQ rev (3m)-73.29%
EPS NY rev (1m)0.15%
EPS NY rev (3m)-73.77%
Revenue NQ rev (1m)0.36%
Revenue NQ rev (3m)3.79%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)1.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.93 | ||
| Fwd PE | 39.06 | ||
| P/S | 18.73 | ||
| P/FCF | 38.96 | ||
| P/OCF | 38.65 | ||
| P/B | 13.39 | ||
| P/tB | 13.9 | ||
| EV/EBITDA | 41.67 |
EPS(TTM)2.14
EY2.18%
EPS(NY)2.52
Fwd EY2.56%
FCF(TTM)2.52
FCFY2.57%
OCF(TTM)2.54
OCFY2.59%
SpS5.25
BVpS7.34
TBVpS7.07
PEG (NY)1.56
PEG (5Y)1.62
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.74% | ||
| ROE | 28.82% | ||
| ROCE | 26.75% | ||
| ROIC | 22.96% | ||
| ROICexc | 80.11% | ||
| ROICexgc | 90.32% | ||
| OM | 42.11% | ||
| PM (TTM) | 40.29% | ||
| GM | 64.41% | ||
| FCFM | 48.06% |
ROA(3y)18.54%
ROA(5y)17.91%
ROE(3y)25.91%
ROE(5y)25.31%
ROIC(3y)21.73%
ROIC(5y)19.92%
ROICexc(3y)60.85%
ROICexc(5y)63.47%
ROICexgc(3y)73.6%
ROICexgc(5y)77.57%
ROCE(3y)25.31%
ROCE(5y)23.2%
ROICexcg growth 3Y-1.76%
ROICexcg growth 5Y-12.71%
ROICexc growth 3Y5.35%
ROICexc growth 5Y-10.62%
OM growth 3Y8.46%
OM growth 5Y4.08%
PM growth 3Y9.16%
PM growth 5Y18.5%
GM growth 3Y-1.05%
GM growth 5Y-0.6%
F-Score7
Asset Turnover0.51
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 41.92% | ||
| Cap/Sales | 0.39% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 112.57% | ||
| Profit Quality | 119.27% | ||
| Current Ratio | 4.47 | ||
| Quick Ratio | 3.69 | ||
| Altman-Z | 24.47 |
F-Score7
WACC9.41%
ROIC/WACC2.44
Cap/Depr(3y)82.86%
Cap/Depr(5y)66.2%
Cap/Sales(3y)1.27%
Cap/Sales(5y)1.02%
Profit Quality(3y)80.68%
Profit Quality(5y)93.14%
High Growth Momentum
Growth
EPS 1Y (TTM)37.12%
EPS 3Y45.21%
EPS 5Y28.34%
EPS Q2Q%31.15%
EPS Next Y29.39%
EPS Next 2Y20.61%
EPS Next 3Y19.42%
EPS Next 5Y18.81%
Revenue 1Y (TTM)18.19%
Revenue growth 3Y36.24%
Revenue growth 5Y22.19%
Sales Q2Q%19.97%
Revenue Next Year19.12%
Revenue Next 2Y18.99%
Revenue Next 3Y18.34%
Revenue Next 5Y17.9%
EBIT growth 1Y33.49%
EBIT growth 3Y47.76%
EBIT growth 5Y27.18%
EBIT Next Year32.43%
EBIT Next 3Y21.28%
EBIT Next 5Y25.18%
FCF growth 1Y401.2%
FCF growth 3Y40.58%
FCF growth 5Y33.07%
OCF growth 1Y372.82%
OCF growth 3Y40.39%
OCF growth 5Y32.23%