Arista Networks (NYSE:ANET) - Share price, News & Analysis

ANET fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	3/6
Past Performance	5/6
Financial Health	6/6
Dividends	0/6

ANET Stock Overview

Arista Networks, Inc. develops, markets, and sells cloud networking solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific.

Rewards

Trading at 34.6% below our estimate of its fair value

Earnings are forecast to grow 12.33% per year

Earnings have grown 21.9% per year over the past 5 years

Risk Analysis

No risks detected for ANET from our risk checks.

Arista Networks Competitors

Cisco Systems

NasdaqGS:CSCO

US$205.9b

Motorola Solutions

NYSE:MSI

US$36.0b

NasdaqGS:FFIV

US$10.2b

Juniper Networks

NYSE:JNPR

US$9.8b

Price History & Performance

Summary of all time highs, changes and price drops for Arista Networks
Historical stock prices
Current Share Price	US$108.65
52 Week High	US$148.57
52 Week Low	US$79.63
Beta	1.28
1 Month Change	-14.17%
3 Month Change	-10.15%
1 Year Change	33.16%
3 Year Change	73.76%
5 Year Change	201.66%
Change since IPO	690.18%

Recent News & Updates

May 15

Is There An Opportunity With Arista Networks, Inc.'s (NYSE:ANET) 35% Undervaluation?

Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Arista Networks, Inc...

May 02

Is It Too Late To Consider Buying Arista Networks, Inc. (NYSE:ANET)?

Arista Networks, Inc. ( NYSE:ANET ) received a lot of attention from a substantial price movement on the NYSE over the...

Shareholder Returns

	ANET	US Communications	US Market
7D	-2.1%	-0.3%	-2.5%
1Y	33.2%	-3.3%	-10.4%

Return vs Industry: ANET exceeded the US Communications industry which returned -3.3% over the past year.

Return vs Market: ANET exceeded the US Market which returned -10.4% over the past year.

Price Volatility

Is ANET's price volatile compared to industry and market?
ANET volatility
ANET Average Weekly Movement	7.0%
Communications Industry Average Movement	7.2%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.7%
10% least volatile stocks in US Market	2.8%

Stable Share Price: ANET is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: ANET's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2004	2,993	Jayshree Ullal	https://www.arista.com

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. 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.

Arista Networks Fundamentals Summary

How do Arista Networks's earnings and revenue compare to its market cap?
ANET fundamental statistics
Market Cap	US$33.49b
Earnings (TTM)	US$932.75m
Revenue (TTM)	US$3.16b

35.9x

P/E Ratio

10.6x

P/S Ratio

Is ANET overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ANET income statement (TTM)
Revenue	US$3.16b
Cost of Revenue	US$1.15b
Gross Profit	US$2.01b
Other Expenses	US$1.08b
Earnings	US$932.75m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	3.03
Gross Margin	63.64%
Net Profit Margin	29.54%
Debt/Equity Ratio	0%

How did ANET perform over the long term?

See historical performance and comparison

Valuation

Is Arista Networks undervalued compared to its fair value and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

34.6%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: ANET ($108.65) is trading below our estimate of fair value ($166.23)

Significantly Below Fair Value: ANET is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: ANET is poor value based on its PE Ratio (35.9x) compared to the US Communications industry average (21.7x).

PE vs Market: ANET is poor value based on its PE Ratio (35.9x) compared to the US market (15.6x).

Price to Earnings Growth Ratio

PEG Ratio: ANET is poor value based on its PEG Ratio (2.9x)

Price to Book Ratio

PB vs Industry: ANET is overvalued based on its PB Ratio (8.1x) compared to the US Communications industry average (1.6x).

Future Growth

How is Arista Networks forecast to perform in the next 1 to 3 years based on estimates from 23 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

12.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ANET's forecast earnings growth (12.3% per year) is above the savings rate (1.9%).

Earnings vs Market: ANET's earnings (12.3% per year) are forecast to grow slower than the US market (12.6% per year).

High Growth Earnings: ANET's earnings are forecast to grow, but not significantly.

Revenue vs Market: ANET's revenue (13.2% per year) is forecast to grow faster than the US market (8% per year).

High Growth Revenue: ANET's revenue (13.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: ANET's Return on Equity is forecast to be high in 3 years time (21.4%)

Past Performance

How has Arista Networks performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

21.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ANET has high quality earnings.

Growing Profit Margin: ANET's current net profit margins (29.5%) are higher than last year (27.5%).

Past Earnings Growth Analysis

Earnings Trend: ANET's earnings have grown significantly by 21.9% per year over the past 5 years.

Accelerating Growth: ANET's earnings growth over the past year (37.9%) exceeds its 5-year average (21.9% per year).

Earnings vs Industry: ANET earnings growth over the past year (37.9%) underperformed the Communications industry 38.2%.

Return on Equity

High ROE: ANET's Return on Equity (22.5%) is considered high.

Financial Health

How is Arista Networks's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: ANET's short term assets ($5.1B) exceed its short term liabilities ($1.4B).

Long Term Liabilities: ANET's short term assets ($5.1B) exceed its long term liabilities ($586.0M).

Debt to Equity History and Analysis

Debt Level: ANET is debt free.

Reducing Debt: ANET has not had any debt for past 5 years.

Debt Coverage: ANET has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: ANET has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

Dividend

What is Arista Networks's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate ANET's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate ANET's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ANET's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ANET's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as ANET has not reported any payouts.

Next Steps

Explore strong dividend paying companies in the Tech industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

8.1yrs

Average management tenure

CEO

Jayshree Ullal (60 yo)

13.58yrs

Tenure

US$15,993,632

Compensation

Ms. Jayshree V. Ullal serves as President, Chief Executive Officer and Director at Arista Networks, Inc. since October 2008. Ms. Ullal serves as Director of Snowflake Inc. since June 2020. She is a network...

CEO Compensation Analysis

Compensation vs Market: Jayshree's total compensation ($USD15.99M) is about average for companies of similar size in the US market ($USD13.26M).

Compensation vs Earnings: Jayshree's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: ANET's management team is seasoned and experienced (8.1 years average tenure).

Board Members

Experienced Board: ANET's board of directors are considered experienced (8.9 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/14 00:00
End of Day Share Price	2022/05/13 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31