Arista Networks, Inc. develops, markets, and sells cloud networking solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific.
The last earnings update was 69 days ago.
Discounted Cash Flow Calculation for DB:117 using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
DB:117 DCF 1st Stage: Next 10 year cash flow forecast
The current share price of
is above its future cash flow value.
Often investors are willing to pay a
for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Arista Networks's earnings available for a low price, and how does
this compare to other companies in the same industry?
Arista Networks's earnings are expected to grow significantly at over 20% yearly.
Arista Networks's revenue is expected to grow by 15.3% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Arista Networks's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
3/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Ms. Jayshree V. Ullal has been President, Chief Executive Officer and Director of Arista Networks, Inc. since October 2008. Ms. Ullal is responsible for building its business in cloud networking. Ms. Ullal is a networking executive veteran with 25 years of experience. She served as Senior Vice President of Data Center, Switching & Security Technology Group of Cisco Systems, Inc. since July 2005. She served as Senior Vice President of Security Technology Group at Cisco Systems Inc., from July 2004 to July 2005. She oversaw nearly 20 mergers and acquisitions for Cisco in the enterprise sector. Prior to her 15 years at Cisco, she served as the Vice President of Marketing at Crescendo Communications, Cisco's first acquisition. Ms. Ullal served as the Senior Vice President of the Optical Networking Group and co-leader of the Service Provider Business Council. She streamlined and doubled the metro optical business and forged key alliances with major service provider customers during the past three years. Prior to that, she served as Vice President and General Manager of the LAN Switching in the Enterprise Line of Business. She serves as a Director and Member of Advisory Board of StorSimple, Inc. She served as Director of Zscaler, Inc., She served as Director of Nishan Systems, Inc. since 2005. She served as Director of Movius Interactive Corporation. She was named as one of the 50 Most Powerful People in Network World. Ms. Ullal was nominated as one of the 20 most powerful Women to Watch in 2001 by Newsweek. She holds a B.S. in electrical engineering from California State University, San Francisco and a M.S. degree in engineering management from Santa Clara University.
Jayshree's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.
Jayshree's remuneration is higher than average for companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Arista Networks management team is over 5 years, this suggests they are a seasoned and experienced team.
CFO & Senior VP
Senior VP & COO
Chief Platform Officer & Senior VP of Engineering Operations
MD of Development & Operations and Head of Technology Centre
Director of Product & Investor Advocacy
Senior VP & General Counsel
Senior Vice President of Global Operations & Marketing
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Arista Networks board of directors is about average.
Arista Networks, Inc. develops, markets, and sells cloud networking solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. The company’s cloud networking solutions consist of extensible operating systems, a set of network applications, as well as gigabit Ethernet switching and routing platforms, including universal leaf, spline, and universal spine products. It also provides post contract customer support services, such as technical support, hardware repair and parts replacement beyond standard warranty, bug fix, patch, and upgrade services. The company serves a range of industries comprising Internet companies, service providers, financial services organizations, government agencies, media and entertainment companies, and others. It markets and sells its products through distributors, value-added resellers, system integrators, and original equipment manufacturer partners, as well as through its direct sales force. The company was formerly known as Arastra, Inc. and changed its name to Arista Networks, Inc. in October 2008. Arista Networks, Inc. was founded in 2004 and is headquartered in Santa Clara, California.
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