ARISTA NETWORKS INC (ANET) Stock Fundamental Analysis
USA - NYSE:ANET - US0404132054 - Common Stock
149.61 USD
+2.95 (+2.01%)
149.55 USD
-0.06 (-0.04%)
We assign a fundamental rating of 7 out of 10 to ANET. ANET was compared to 48 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 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
In the past year ANET was profitable.
ANET had a positive operating cash flow in the past year.
In the past 5 years ANET has always been profitable.
ANET had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of ANET (19.67%) is better than 97.92% of its industry peers.
ANET has a Return On Equity of 29.83%. This is amongst the best in the industry. ANET outperforms 93.75% of its industry peers.
Looking at the Return On Invested Capital, with a value of 23.84%, ANET belongs to the top of the industry, outperforming 97.92% of the companies in the same industry.
ANET had an Average Return On Invested Capital over the past 3 years of 23.71%. This is significantly above the industry average of 13.71%.
The last Return On Invested Capital (23.84%) for ANET is above the 3 year average (23.71%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.67% | ||
| ROE | 29.83% | ||
| ROIC | 23.84% |
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
Looking at the Profit Margin, with a value of 40.89%, ANET belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
ANET's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 43.14%, 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.
ANET's Gross Margin of 64.24% is amongst the best of the industry. ANET outperforms 87.50% 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 Rank | Sector Rank | ||
|---|---|---|---|
| OM | 43.14% | ||
| PM (TTM) | 40.89% | ||
| GM | 64.24% |
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
ANET has more shares outstanding than it did 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 22.19 indicates that ANET is not in any danger for bankruptcy at the moment.
ANET's Altman-Z score of 22.19 is amongst the best of the industry. ANET outperforms 95.83% 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 | 22.19 |
ROIC/WACC2.39
WACC9.97%
2.3 Liquidity
ANET has a Current Ratio of 3.33. This indicates that ANET is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 3.33, ANET belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.
A Quick Ratio of 2.82 indicates that ANET has no problem at all paying its short term obligations.
ANET has a better Quick ratio (2.82) than 79.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.33 | ||
| Quick Ratio | 2.82 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 31.50% over the past year.
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.
The Revenue has grown by 25.97% in the past year. This is a very strong growth!
ANET shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 23.77% yearly.
EPS 1Y (TTM)31.5%
EPS 3Y46.94%
EPS 5Y30.17%
EPS Q2Q%39.05%
Revenue 1Y (TTM)25.97%
Revenue growth 3Y33.43%
Revenue growth 5Y23.77%
Sales Q2Q%30.43%
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 19.55% yearly.
Based on estimates for the next years, ANET will show a quite strong growth in Revenue. The Revenue will grow by 19.68% on average per year.
EPS Next Y25.4%
EPS Next 2Y20.53%
EPS Next 3Y19.9%
EPS Next 5Y19.55%
Revenue Next Year25.58%
Revenue Next 2Y22.33%
Revenue Next 3Y21.09%
Revenue Next 5Y19.68%
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
Based on the Price/Earnings ratio of 56.89, the valuation of ANET can be described as expensive.
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 27.38.
With a Price/Forward Earnings ratio of 45.32, ANET can be considered very expensive at the moment.
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 22.86, ANET is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 56.89 | ||
| Fwd PE | 45.32 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as ANET.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ANET is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 47.3 | ||
| EV/EBITDA | 48.42 |
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.
ANET's earnings are expected to grow with 19.90% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.24
PEG (5Y)1.89
EPS Next 2Y20.53%
EPS Next 3Y19.9%
5. Dividend
5.1 Amount
ANET does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
149.61
+2.95 (+2.01%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners69.86%
Inst Owner Change-1.34%
Ins Owners3.35%
Ins Owner Change-0.69%
Market Cap188.04B
Analysts81.82
Price Target149.37 (-0.16%)
Short Float %1.22%
Short Ratio1.34
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)8.98%
Min EPS beat(2)7.74%
Max EPS beat(2)10.22%
EPS beat(4)4
Avg EPS beat(4)10.73%
Min EPS beat(4)7.74%
Max EPS beat(4)12.91%
EPS beat(8)8
Avg EPS beat(8)11.75%
EPS beat(12)12
Avg EPS beat(12)11.47%
EPS beat(16)16
Avg EPS beat(16)10.73%
Revenue beat(2)1
Avg Revenue beat(2)1.15%
Min Revenue beat(2)-0.26%
Max Revenue beat(2)2.55%
Revenue beat(4)2
Avg Revenue beat(4)0.89%
Min Revenue beat(4)-0.6%
Max Revenue beat(4)2.55%
Revenue beat(8)4
Avg Revenue beat(8)0.24%
Revenue beat(12)8
Avg Revenue beat(12)1.68%
Revenue beat(16)11
Avg Revenue beat(16)1.77%
PT rev (1m)32.44%
PT rev (3m)38.36%
EPS NQ rev (1m)2.07%
EPS NQ rev (3m)14.66%
EPS NY rev (1m)8.97%
EPS NY rev (3m)9.26%
Revenue NQ rev (1m)0.61%
Revenue NQ rev (3m)7.74%
Revenue NY rev (1m)4.21%
Revenue NY rev (3m)4.72%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 56.89 | ||
| Fwd PE | 45.32 | ||
| P/S | 23.65 | ||
| P/FCF | 47.3 | ||
| P/OCF | 46.46 | ||
| P/B | 17.25 | ||
| P/tB | 17.93 | ||
| EV/EBITDA | 48.42 |
EPS(TTM)2.63
EY1.76%
EPS(NY)3.3
Fwd EY2.21%
FCF(TTM)3.16
FCFY2.11%
OCF(TTM)3.22
OCFY2.15%
SpS6.33
BVpS8.67
TBVpS8.34
PEG (NY)2.24
PEG (5Y)1.89
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.67% | ||
| ROE | 29.83% | ||
| ROCE | 27.48% | ||
| ROIC | 23.84% | ||
| ROICexc | 81.79% | ||
| ROICexgc | 92.37% | ||
| OM | 43.14% | ||
| PM (TTM) | 40.89% | ||
| GM | 64.24% | ||
| FCFM | 50% |
ROA(3y)20.41%
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 Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 124.95% | ||
| Cap/Sales | 0.9% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 116.05% | ||
| Profit Quality | 122.26% | ||
| Current Ratio | 3.33 | ||
| Quick Ratio | 2.82 | ||
| Altman-Z | 22.19 |
F-Score6
WACC9.97%
ROIC/WACC2.39
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)31.5%
EPS 3Y46.94%
EPS 5Y30.17%
EPS Q2Q%39.05%
EPS Next Y25.4%
EPS Next 2Y20.53%
EPS Next 3Y19.9%
EPS Next 5Y19.55%
Revenue 1Y (TTM)25.97%
Revenue growth 3Y33.43%
Revenue growth 5Y23.77%
Sales Q2Q%30.43%
Revenue Next Year25.58%
Revenue Next 2Y22.33%
Revenue Next 3Y21.09%
Revenue Next 5Y19.68%
EBIT growth 1Y31.8%
EBIT growth 3Y47.12%
EBIT growth 5Y29.59%
EBIT Next Year20.52%
EBIT Next 3Y18.69%
EBIT Next 5Y22.49%
FCF growth 1Y320.65%
FCF growth 3Y56.94%
FCF growth 5Y31.15%
OCF growth 1Y311.66%
OCF growth 3Y53.97%
OCF growth 5Y30.95%