ARISTA NETWORKS INC (ANET) Stock Fundamental Analysis
NYSE:ANET - New York Stock Exchange, Inc. - US0404132054 - Common Stock - Currency: USD
Overall ANET gets a fundamental rating of 7 out of 10. We evaluated ANET against 49 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!
1. Profitability
1.1 Basic Checks
In the past year ANET was profitable.
ANET had a positive operating cash flow in the past year.
ANET had positive earnings in each of the past 5 years.
ANET had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of ANET (20.31%) is better than 97.96% of its industry peers.
ANET has a Return On Equity of 28.54%. This is amongst the best in the industry. ANET outperforms 93.88% of its industry peers.
ANET's Return On Invested Capital of 22.59% is amongst the best of the industry. ANET outperforms 95.92% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ANET 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's Profit Margin of 40.73% is amongst the best of the industry. ANET outperforms 100.00% of its industry peers.
ANET's Profit Margin has improved in the last couple of years.
ANET has a better Operating Margin (42.05%) than 100.00% of its industry peers.
In the last couple of years the Operating Margin of ANET has grown nicely.
With an excellent Gross Margin value of 64.13%, ANET belongs to the best 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.
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 15.97 indicates that ANET is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 15.97, ANET belongs to the top of the industry, outperforming 97.96% of the companies in the same industry.
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 | 15.97 |
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
The Earnings Per Share has grown by an impressive 31.36% over the past year.
The Earnings Per Share has been growing by 30.17% 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 19.50% in the last year.
The Revenue has been growing by 23.77% on average over the past years. This is a very strong growth!
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.
The Revenue is expected to grow by 17.53% on average over the next years. This is quite good.
EPS Next Y11.56%
EPS Next 2Y14.78%
EPS Next 3Y16.02%
EPS Next 5Y16.79%
Revenue Next Year19.44%
Revenue Next 2Y18.63%
Revenue Next 3Y18.33%
Revenue Next 5Y17.53%
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.
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
The Price/Earnings ratio is 31.37, which means the current valuation is very expensive for ANET.
Based on the Price/Earnings ratio, ANET is valued a bit cheaper than the industry average as 61.22% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of ANET to the average of the S&P500 Index (28.29), we can say ANET is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 28.09, the valuation of ANET can be described as expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as ANET.
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 | 28.09 |
4.2 Price Multiples
ANET's Enterprise Value to EBITDA ratio is in line with the industry average.
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 | 24.32 | ||
| EV/EBITDA | 25.13 |
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 16.02% in the coming years.
PEG (NY)2.71
PEG (5Y)1.04
EPS Next 2Y14.78%
EPS Next 3Y16.02%
5. Dividend
5.1 Amount
ANET does not give a dividend.
| 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 Change0.62%
Ins Owners3.65%
Ins Owner Change0.38%
Market Cap89.40B
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)0.16%
EPS NY rev (3m)1.14%
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 | 28.09 | ||
| P/S | 12.77 | ||
| P/FCF | 24.32 | ||
| P/OCF | 24.11 | ||
| P/B | 8.94 | ||
| P/tB | 9.25 | ||
| EV/EBITDA | 25.13 |
EPS(TTM)2.27
EY3.19%
EPS(NY)2.54
Fwd EY3.56%
FCF(TTM)2.93
FCFY4.11%
OCF(TTM)2.95
OCFY4.15%
SpS5.58
BVpS7.96
TBVpS7.7
PEG (NY)2.71
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 | 15.97 |
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 Y11.56%
EPS Next 2Y14.78%
EPS Next 3Y16.02%
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%