ARISTA NETWORKS INC (ANET) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ANET - US0404132054 - Common Stock
147.95 USD
+4.23 (+2.94%)
Overall ANET gets a fundamental rating of 8 out of 10. We evaluated ANET against 48 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 expensive, but it does show an excellent growth. 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.
- ANET had a positive operating cash flow in the past year.
- Each year in the past 5 years ANET has been profitable.
- ANET had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- With an excellent Return On Assets value of 18.60%, ANET belongs to the best of the industry, outperforming 95.83% of the companies in the same industry.
- The Return On Equity of ANET (28.19%) is better than 93.75% of its industry peers.
- The Return On Invested Capital of ANET (23.49%) is better than 97.92% 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 12.17%.
| 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
- The Profit Margin of ANET (39.73%) is better than 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 42.88%, 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.
- 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.
- 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
- An Altman-Z score of 20.22 indicates that ANET is not in any danger for bankruptcy at the moment.
- With an excellent Altman-Z score value of 20.22, ANET belongs to the best of the industry, outperforming 91.67% of the companies in the same industry.
- 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 | 20.22 |
ROIC/WACC2.38
WACC9.89%
2.3 Liquidity
- A Current Ratio of 3.25 indicates that ANET has no problem at all paying 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 has a Quick ratio of 2.79. This is amongst the best in 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
- ANET shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 29.75%, 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 very strong growth in Revenue. The Revenue has grown by 27.75%.
- ANET shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 23.77% yearly.
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
- The Earnings Per Share is expected to grow by 21.87% on average over the next years. This is a very strong growth
- 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
- 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.
- 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
- With a Price/Earnings ratio of 53.22, ANET can be considered very expensive at the moment.
- The rest of the industry has a similar Price/Earnings ratio as ANET.
- ANET's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.25.
- A Price/Forward Earnings ratio of 43.36 indicates a quite expensive valuation of 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 25.98, ANET is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 53.22 | ||
| Fwd PE | 43.36 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ANET is on the same level as its industry peers.
- ANET's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 46.05 | ||
| EV/EBITDA | 44.22 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive 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)1.85
PEG (5Y)1.76
EPS Next 2Y22.53%
EPS Next 3Y21.67%
5. Dividend
5.1 Amount
- No dividends for ANET!.
| 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.