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ARISTA NETWORKS INC (ANET) Stock Fundamental Analysis

NYSE:ANET - New York Stock Exchange, Inc. - US0404131064 - Common Stock

121.5  +1.55 (+1.29%)

After market: 124 +2.5 (+2.06%)

Fundamental Rating

7

ANET gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 51 industry peers in the Communications Equipment industry. ANET gets an excellent profitability rating and is at the same time showing great financial health properties. ANET is valued quite expensively, but it does show have an excellent growth rating. These ratings would make ANET suitable for growth and quality investing!


Dividend Valuation Growth Profitability Health

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9

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.
In the past 5 years ANET has always been profitable.
ANET had a positive operating cash flow in each of the past 5 years.
ANET Yearly Net Income VS EBIT VS OCF VS FCFANET Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

1.2 Ratios

ANET's Return On Assets of 20.74% is amongst the best of the industry. ANET outperforms 98.04% of its industry peers.
ANET has a better Return On Equity (28.82%) than 96.08% of its industry peers.
The Return On Invested Capital of ANET (22.96%) is better than 94.12% 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 11.02%.
The 3 year average ROIC (21.73%) for ANET is below the current ROIC(22.96%), indicating increased profibility in the last year.
Industry RankSector 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%
ANET Yearly ROA, ROE, ROICANET Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 5 10 15 20 25

1.3 Margins

ANET's Profit Margin of 40.29% is amongst the best of the industry. ANET outperforms 100.00% of its industry peers.
In the last couple of years the Profit Margin of ANET has grown nicely.
ANET has a Operating Margin of 42.11%. This is amongst the best in the industry. ANET outperforms 100.00% of its industry peers.
ANET's Operating Margin has improved in the last couple of years.
ANET's Gross Margin of 64.41% is amongst the best of the industry. ANET outperforms 88.24% of its industry peers.
In the last couple of years the Gross Margin of ANET has remained more or less at the same level.
Industry RankSector 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%
ANET Yearly Profit, Operating, Gross MarginsANET Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 20 40 60

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9

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), 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.
ANET Yearly Shares OutstandingANET Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M 1B
ANET Yearly Total Debt VS Total AssetsANET Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B 8B

2.2 Solvency

ANET has an Altman-Z score of 27.95. This indicates that ANET is financially healthy and has little risk of bankruptcy at the moment.
ANET has a better Altman-Z score (27.95) than 100.00% 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 RankSector Rank
Debt/Equity 0
Debt/FCF 0
Altman-Z 27.95
ROIC/WACC2.35
WACC9.76%
ANET Yearly LT Debt VS Equity VS FCFANET Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B

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.
ANET's Current ratio of 4.47 is amongst the best of the industry. ANET outperforms 84.31% 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.
With an excellent Quick ratio value of 3.69, ANET belongs to the best of the industry, outperforming 88.24% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 4.47
Quick Ratio 3.69
ANET Yearly Current Assets VS Current LiabilitesANET Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B 8B

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8

3. Growth

3.1 Past

ANET shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 37.12%, 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 28.34% on average per year.
ANET shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 18.19%.
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

The Earnings Per Share is expected to grow by 18.81% on average over the next years. This is quite good.
The Revenue is expected to grow by 17.90% on average over the next years. This is quite good.
EPS Next Y29.19%
EPS Next 2Y20.37%
EPS Next 3Y19.09%
EPS Next 5Y18.81%
Revenue Next Year19.04%
Revenue Next 2Y18.84%
Revenue Next 3Y18.31%
Revenue Next 5Y17.9%

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.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
ANET Yearly Revenue VS EstimatesANET Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2B 4B 6B 8B 10B
ANET Yearly EPS VS EstimatesANET Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 1 2 3 4

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2

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 56.78, the valuation of ANET can be described as expensive.
ANET's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 28.29, ANET is valued quite expensively.
The Price/Forward Earnings ratio is 48.47, which means the current valuation is very expensive for ANET.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ANET is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.44, ANET is valued quite expensively.
Industry RankSector Rank
PE 56.78
Fwd PE 48.47
ANET Price Earnings VS Forward Price EarningsANET Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as ANET.
ANET's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 48.16
EV/EBITDA 48.99
ANET Per share dataANET EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 2 4 6

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of ANET may justify a higher PE ratio.
ANET's earnings are expected to grow with 19.09% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.95
PEG (5Y)2
EPS Next 2Y20.37%
EPS Next 3Y19.09%

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0

5. Dividend

5.1 Amount

No dividends for ANET!.
Industry RankSector Rank
Dividend Yield N/A

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ARISTA NETWORKS INC

NYSE:ANET (1/21/2025, 8:04:00 PM)

After market: 124 +2.5 (+2.06%)

121.5

+1.55 (+1.29%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)11-07 2024-11-07/amc
Earnings (Next)02-10 2025-02-10/amc
Inst Owners70.76%
Inst Owner Change1.44%
Ins Owners3.55%
Ins Owner Change-0.21%
Market Cap153.06B
Analysts81.33
Price Target110.16 (-9.33%)
Short Float %N/A
Short Ratio3.05
Dividend
Industry RankSector 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)-74.65%
PT rev (3m)-70.08%
EPS NQ rev (1m)-74.84%
EPS NQ rev (3m)-71.97%
EPS NY rev (1m)0.29%
EPS NY rev (3m)-73.47%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)8.04%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.42%
Valuation
Industry RankSector Rank
PE 56.78
Fwd PE 48.47
P/S 23.14
P/FCF 48.16
P/OCF 47.78
P/B 16.55
P/tB 17.18
EV/EBITDA 48.99
EPS(TTM)2.14
EY1.76%
EPS(NY)2.51
Fwd EY2.06%
FCF(TTM)2.52
FCFY2.08%
OCF(TTM)2.54
OCFY2.09%
SpS5.25
BVpS7.34
TBVpS7.07
PEG (NY)1.95
PEG (5Y)2
Profitability
Industry RankSector 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 RankSector 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 27.95
F-Score7
WACC9.76%
ROIC/WACC2.35
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 Y29.19%
EPS Next 2Y20.37%
EPS Next 3Y19.09%
EPS Next 5Y18.81%
Revenue 1Y (TTM)18.19%
Revenue growth 3Y36.24%
Revenue growth 5Y22.19%
Sales Q2Q%19.97%
Revenue Next Year19.04%
Revenue Next 2Y18.84%
Revenue Next 3Y18.31%
Revenue Next 5Y17.9%
EBIT growth 1Y33.49%
EBIT growth 3Y47.76%
EBIT growth 5Y27.18%
EBIT Next Year32.35%
EBIT Next 3Y21.12%
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%