ARISTA NETWORKS INC (ANET) Stock Fundamental Analysis
NYSE:ANET - New York Stock Exchange, Inc. - US0404132054 - Common Stock - Currency: USD
Taking everything into account, ANET scores 7 out of 10 in our fundamental rating. ANET was compared to 49 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 shows excellent growth, but is valued quite expensive already. These ratings could make ANET a good candidate 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
ANET has a better Return On Assets (20.31%) than 97.96% of its industry peers.
With an excellent Return On Equity value of 28.54%, ANET belongs to the best of the industry, outperforming 93.88% of the companies in the same industry.
ANET's Return On Invested Capital of 22.59% is amongst the best of the industry. ANET outperforms 95.92% 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 10.88%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.31% | ||
| ROE | 28.54% | ||
| ROIC | 22.59% |
ROA(3y)20.42%
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 Profit Margin of 40.73%. This is amongst the best in the industry. ANET outperforms 100.00% of its industry peers.
In the last couple of years the Profit Margin of ANET has grown nicely.
Looking at the Operating Margin, with a value of 42.05%, 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.
Looking at the Gross Margin, with a value of 64.13%, ANET belongs to the top of the industry, outperforming 85.71% 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 | 42.05% | ||
| PM (TTM) | 40.73% | ||
| GM | 64.13% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ANET is creating value.
The number of shares outstanding for ANET has been increased compared to 1 year ago.
The number of shares outstanding for ANET has been increased compared to 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 16.03. This indicates that ANET is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ANET (16.03) is better than 97.96% 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 | 16.03 |
ROIC/WACC2.34
WACC9.67%
2.3 Liquidity
A Current Ratio of 4.36 indicates that ANET has no problem at all paying its short term obligations.
ANET has a better Current ratio (4.36) than 85.71% of its industry peers.
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's Quick ratio of 3.69 is amongst the best of the industry. ANET outperforms 91.84% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.36 | ||
| Quick Ratio | 3.69 |
3. Growth
3.1 Past
ANET shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 31.36%, which is quite impressive.
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.
Looking at the last year, ANET shows a quite strong growth in Revenue. The Revenue has grown by 19.50% in the last year.
ANET shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 23.77% yearly.
EPS 1Y (TTM)31.36%
EPS 3Y46.94%
EPS 5Y30.17%
EPS Q2Q%25%
Revenue 1Y (TTM)19.5%
Revenue growth 3Y33.43%
Revenue growth 5Y23.77%
Sales Q2Q%25.32%
3.2 Future
Based on estimates for the next years, ANET will show a quite strong growth in Earnings Per Share. The EPS will grow by 16.79% on average per year.
ANET is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 17.53% yearly.
EPS Next Y11.91%
EPS Next 2Y15.05%
EPS Next 3Y17.02%
EPS Next 5Y16.79%
Revenue Next Year19.44%
Revenue Next 2Y18.63%
Revenue Next 3Y18.33%
Revenue Next 5Y17.53%
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.
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
A Price/Earnings ratio of 31.37 indicates a quite expensive valuation of ANET.
Based on the Price/Earnings ratio, ANET is valued a bit cheaper than 61.22% of the companies in the same industry.
ANET's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.29.
The Price/Forward Earnings ratio is 28.00, which means the current valuation is very expensive for ANET.
ANET's Price/Forward Earnings ratio is in line with the industry average.
ANET's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 21.08.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.37 | ||
| Fwd PE | 28 |
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 | 24.43 | ||
| EV/EBITDA | 25.26 |
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.
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 17.02% in the coming years.
PEG (NY)2.63
PEG (5Y)1.04
EPS Next 2Y15.05%
EPS Next 3Y17.02%
5. Dividend
5.1 Amount
No dividends for ANET!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
71.2
-0.67 (-0.93%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners68.57%
Inst Owner Change0.06%
Ins Owners3.65%
Ins Owner Change0.38%
Market Cap89.79B
Analysts81.33
Price Target118.48 (66.4%)
Short Float %1.47%
Short Ratio1.41
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)12.49%
Min EPS beat(2)12.07%
Max EPS beat(2)12.91%
EPS beat(4)4
Avg EPS beat(4)10.7%
Min EPS beat(4)5.76%
Max EPS beat(4)12.91%
EPS beat(8)8
Avg EPS beat(8)11.02%
EPS beat(12)12
Avg EPS beat(12)11.46%
EPS beat(16)16
Avg EPS beat(16)10.09%
Revenue beat(2)1
Avg Revenue beat(2)0.63%
Min Revenue beat(2)-0.6%
Max Revenue beat(2)1.85%
Revenue beat(4)2
Avg Revenue beat(4)0.26%
Min Revenue beat(4)-0.6%
Max Revenue beat(4)1.85%
Revenue beat(8)5
Avg Revenue beat(8)0.6%
Revenue beat(12)9
Avg Revenue beat(12)2.01%
Revenue beat(16)12
Avg Revenue beat(16)1.8%
PT rev (1m)-1.12%
PT rev (3m)7.56%
EPS NQ rev (1m)0%
EPS NQ rev (3m)5.37%
EPS NY rev (1m)0.48%
EPS NY rev (3m)1.46%
Revenue NQ rev (1m)0.2%
Revenue NQ rev (3m)3.77%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)0.75%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.37 | ||
| Fwd PE | 28 | ||
| P/S | 12.82 | ||
| P/FCF | 24.43 | ||
| P/OCF | 24.21 | ||
| P/B | 8.98 | ||
| P/tB | 9.29 | ||
| EV/EBITDA | 25.26 |
EPS(TTM)2.27
EY3.19%
EPS(NY)2.54
Fwd EY3.57%
FCF(TTM)2.92
FCFY4.09%
OCF(TTM)2.94
OCFY4.13%
SpS5.55
BVpS7.93
TBVpS7.66
PEG (NY)2.63
PEG (5Y)1.04
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.31% | ||
| ROE | 28.54% | ||
| ROCE | 26.03% | ||
| ROIC | 22.59% | ||
| ROICexc | 84.93% | ||
| ROICexgc | 95.42% | ||
| OM | 42.05% | ||
| PM (TTM) | 40.73% | ||
| GM | 64.13% | ||
| FCFM | 52.49% |
ROA(3y)20.42%
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 Turnover0.5
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 51.63% | ||
| Cap/Sales | 0.46% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 123.33% | ||
| Profit Quality | 128.9% | ||
| Current Ratio | 4.36 | ||
| Quick Ratio | 3.69 | ||
| Altman-Z | 16.03 |
F-Score6
WACC9.67%
ROIC/WACC2.34
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)31.36%
EPS 3Y46.94%
EPS 5Y30.17%
EPS Q2Q%25%
EPS Next Y11.91%
EPS Next 2Y15.05%
EPS Next 3Y17.02%
EPS Next 5Y16.79%
Revenue 1Y (TTM)19.5%
Revenue growth 3Y33.43%
Revenue growth 5Y23.77%
Sales Q2Q%25.32%
Revenue Next Year19.44%
Revenue Next 2Y18.63%
Revenue Next 3Y18.33%
Revenue Next 5Y17.53%
EBIT growth 1Y30.45%
EBIT growth 3Y47.12%
EBIT growth 5Y29.59%
EBIT Next Year16.97%
EBIT Next 3Y18.72%
EBIT Next 5YN/A
FCF growth 1Y83.85%
FCF growth 3Y56.94%
FCF growth 5Y31.15%
OCF growth 1Y82.31%
OCF growth 3Y53.97%
OCF growth 5Y30.95%