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My main narrative for ANET:
- Young company (founded 2004, IPO 2014), disrupting CISCO in the High Speed Switch Market (for Datacenter, Cloud and AI)
- Very successful introduction of Fast Internet Switches for Brokerage (High Speed Trading)
- Internet Speed will continuously increase to meet “tactile internet” capabilities (control robots or vehicles over distance (through internet) with nearly no delay)
- Perfect fit of Arista HW and Arista SW, as known from Apple devices, leads to high customer satisfaction and customer binding
I focus also on:
- More equity than debt. Ratio is at 0%. So debt free company!
- A ROE of about 20%. Past 29%, future 24%. Also fine.
Actually it is at fair value (FV $76 from SWS), but keep in mind the underlaying FCF
- 2024: $2.135m
- 2027: $4.470m So ANET need to grow FCF by about 2x in next 3y.
I think that’s sporty but still realistic.
A debt-free company with a high ROE - my money is well invested.
Update 16.12.24: Tipo: FV $375 corrected to $76.
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Disclaimer
The user Tokyo has a position in NYSE:ANET. Simply Wall St has no position in any of the companies mentioned. 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.
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WA
Consensus Narrative from 23 Analysts
Advanced AI Networking Solutions Will Drive Significant Market Growth
Key Takeaways Growth in AI infrastructure and advanced networking solutions is expected to drive significant revenue increases through market penetration and product diversification. Strategic supply chain improvements and R&D investments are poised to strengthen Arista's competitive position and improve net margins.
View narrativeUS$108.48
FV
0.4% undervalued intrinsic discount22.96%
Revenue growth p.a.
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