NYSE:ANET

Stock Analysis Report

Executive Summary

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


Snowflake Analysis

Flawless balance sheet with outstanding track record.


Similar Companies

Share Price & News

How has Arista Networks's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ANET has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

5.7%

ANET

3.9%

US Communications

1.7%

US Market


1 Year Return

-5.5%

ANET

7.2%

US Communications

23.2%

US Market

Return vs Industry: ANET underperformed the US Communications industry which returned 6.7% over the past year.

Return vs Market: ANET underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

ANETIndustryMarket
7 Day5.7%3.9%1.7%
30 Day9.6%5.1%4.2%
90 Day-8.4%5.2%11.9%
1 Year-5.5%-5.5%9.5%7.2%25.8%23.2%
3 Year144.2%144.2%54.0%44.2%52.8%42.9%
5 Year245.8%245.8%76.7%56.6%75.2%55.8%

Price Volatility Vs. Market

How volatile is Arista Networks's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

21.69x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ANET ($213.05) is trading above our estimate of fair value ($205.51)

Significantly Below Fair Value: ANET is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ANET is poor value based on its PE Ratio (21.1x) compared to the Communications industry average (21.1x).

PE vs Market: ANET is poor value based on its PE Ratio (21.1x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: ANET is poor value based on its PEG Ratio (29.6x)


Price to Book Ratio

PB vs Industry: ANET is overvalued based on its PB Ratio (6.1x) compared to the US Communications industry average (1.9x).


Next Steps

Future Growth

How is Arista Networks forecast to perform in the next 1 to 3 years based on estimates from 27 analysts?

0.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ANET's forecast earnings growth (0.7% per year) is below the savings rate (1.7%).

Earnings vs Market: ANET's earnings (0.7% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: ANET's revenue (6.7% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: ANET's revenue (6.7% 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 (20.9%)


Next Steps

Past Performance

How has Arista Networks performed over the past 5 years?

41.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ANET has high quality earnings.

Growing Profit Margin: ANET's current net profit margins (31.3%) are higher than last year (12.9%).


Past Earnings Growth Analysis

Earnings Trend: ANET's earnings have grown significantly by 41.3% per year over the past 5 years.

Accelerating Growth: ANET's earnings growth over the past year (194.1%) exceeds its 5-year average (41.3% per year).

Earnings vs Industry: ANET earnings growth over the past year (194.1%) exceeded the Communications industry 12.6%.


Return on Equity

High ROE: ANET's Return on Equity (29%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Arista Networks's financial position?


Financial Position Analysis

Short Term Liabilities: ANET's short term assets ($3.2B) exceed its short term liabilities ($548.2M).

Long Term Liabilities: ANET's short term assets ($3.2B) exceed its long term liabilities ($415.6M).


Debt to Equity History and Analysis

Debt Level: ANET is debt free.

Reducing Debt: ANET had no debt 5 years ago.

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

Inventory Level: ANET has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if ANET's debt is covered by short term assets.


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.6%industryaverage2.8%forecastin3Years0%

Current dividend yield vs market & industry

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

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


Current Payout to Shareholders

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


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ANET's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Arista Networks's salary, the management and board of directors tenure and is there insider trading?

6.9yrs

Average management tenure


CEO

Jayshree Ullal (58yo)

11.3yrs

Tenure

US$7,550,074

Compensation

Ms. Jayshree V. Ullal serves as President, Chief Executive Officer and Director at Arista Networks, Inc. since October 2008. Ms. Ullal is responsible for building its business in cloud networking. She is a ...


CEO Compensation Analysis

Compensation vs Market: Jayshree's total compensation ($USD7.55M) is about average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Jayshree's compensation has been consistent with company performance over the past year.


Management Age and Tenure

6.9yrs

Average Tenure

51yo

Average Age

Experienced Management: ANET's management team is seasoned and experienced (6.9 years average tenure).


Board Age and Tenure

6.6yrs

Average Tenure

59yo

Average Age

Experienced Board: ANET's board of directors are considered experienced (6.6 years average tenure).


Insider Trading

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 been diluted in the past year, with total shares outstanding growing by 2.5%.


Management Team

  • Andy Bechtolsheim (63yo)

    Co-Founder

    • Tenure: 16yrs
    • Compensation: US$7.54m
  • Jayshree Ullal (58yo)

    President

    • Tenure: 11.3yrs
    • Compensation: US$7.55m
  • Ken Duda (47yo)

    Co-Founder

    • Tenure: 8.3yrs
    • Compensation: US$4.95m
  • Marc Taxay (50yo)

    Senior VP & General Counsel

    • Tenure: 6.9yrs
    • Compensation: US$2.14m
  • Mark Foss

    Senior Vice President of Global Operations & Marketing

    • Anshul Sadana (42yo)

      Senior VP & COO

      • Tenure: 0.8yrs
      • Compensation: US$5.74m
    • Ita Brennan (52yo)

      CFO , Senior VP & Principal Accounting Officer

      • Tenure: 4.7yrs
      • Compensation: US$3.85m
    • Amod Dani

      MD of Development & Operations and Head of Technology Centre

      • Charles Yager

        Director of Product & Investor Advocacy

        • Ciarán Kennedy

          Chief Sales Officer


          Board Members

          • Charlie Giancarlo (61yo)

            Independent Director

            • Tenure: 6.8yrs
            • Compensation: US$97.00k
          • Mark Templeton (66yo)

            Independent Director

            • Tenure: 2.6yrs
            • Compensation: US$95.00k
          • Ann Mather (59yo)

            Independent Director

            • Tenure: 6.6yrs
            • Compensation: US$100.00k
          • Andy Bechtolsheim (63yo)

            Co-Founder

            • Tenure: 16yrs
            • Compensation: US$7.54m
          • Jayshree Ullal (58yo)

            President

            • Tenure: 11.3yrs
            • Compensation: US$7.55m
          • Dan Scheinman (56yo)

            Lead Independent Director

            • Tenure: 0.9yrs
            • Compensation: US$97.00k
          • Nikos Theodosopoulos (56yo)

            Independent Director

            • Tenure: 5.8yrs
            • Compensation: US$95.00k

          Company Information

          Arista Networks, Inc.'s company bio, employee growth, exchange listings and data sources


          Key Information

          • Name: Arista Networks, Inc.
          • Ticker: ANET
          • Exchange: NYSE
          • Founded: 2004
          • Industry: Communications Equipment
          • Sector: Tech
          • Market Cap: US$16.750b
          • Shares outstanding: 76.40m
          • Website: https://www.arista.com

          Number of Employees


          Location

          • Arista Networks, Inc.
          • 5453 Great America Parkway
          • Santa Clara
          • California
          • 95054
          • United States

          Listings

          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
          ANETNYSE (New York Stock Exchange)YesCommon sharesUSUSDJun 2014
          117DB (Deutsche Boerse AG)YesCommon sharesDEEURJun 2014
          0HHRLSE (London Stock Exchange)YesCommon sharesGBUSDJun 2014
          ANET *BMV (Bolsa Mexicana de Valores)YesCommon sharesMXMXNJun 2014
          ANETWBAG (Wiener Boerse AG)YesCommon sharesATEURJun 2014

          Biography

          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. 


          Company Analysis and Financial Data Status

          All financial data provided by Standard & Poor's Capital IQ.
          DataLast Updated (UTC time)
          Company Analysis2020/01/17 02:22
          End of Day Share Price2020/01/16 00:00
          Earnings2019/09/30
          Annual Earnings2018/12/31


          Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.