- Conservatively assumes:
- 15% yearly Revenue Growth Rate (currently 17.22% as of 2025-11-12), assuming demand for network switches eventually tapers off.
- 35% Net Profit Margin due to increased competition for Market Share, Compensation, R&D, etc (currently a whopping 39.73% as of 2025-11-12).
- A sizable 10% risk discount factor to account for NVDA's network switching products eating into ANET's market share, intense competition from NVDA and other current and future competitors in the network switching space, the AI, DC, Hyperscalers and Financial Trading markets significantly falling from current levels, high customer concentration (a few customers comprise most of the revenue).
My Goal in this scenario was to model the above assumptions and it seems that even if they are the base case, the stock is discounted and could come out ahead (my opinion.)
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Disclaimer
The user Kafka has a position in NYSE:ANET. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
