Why NYSE:ANET Is a Promising High-Growth Stock in the Midst of Consolidation.

For growth-minded investors, high revenue and EPS growth are key criteria. Today, we'll examine whether ARISTA NETWORKS INC (NYSE:ANET) fits the bill for growth investing, particularly as it forms a base and hints at a potential breakout. Remember, due diligence is essential, but ARISTA NETWORKS INC has caught our attention on our screen for growth with base formation. It may warrant additional investigation.

A Closer Look at Growth for NYSE:ANET

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:ANET has earned a 8 for growth:

• The Earnings Per Share has grown by an impressive 44.68% over the past year.
• ANET shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 28.34% yearly.
• The Revenue has grown by 25.22% in the past year. This is a very strong growth!
• Measured over the past years, ANET shows a very strong growth in Revenue. The Revenue has been growing by 22.19% on average per year.
• Based on estimates for the next years, ANET will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.72% on average per year.
• ANET is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.90% yearly.

Assessing Health Metrics for NYSE:ANET

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:ANET has earned a 9 out of 10:

• ANET has an Altman-Z score of 24.15. This indicates that ANET is financially healthy and has little risk of bankruptcy at the moment.
• With an excellent Altman-Z score value of 24.15, ANET belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
• ANET has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
• ANET has a Current Ratio of 5.01. This indicates that ANET is financially healthy and has no problem in meeting its short term obligations.
• ANET has a better Current ratio (5.01) than 92.59% of its industry peers.
• A Quick Ratio of 3.87 indicates that ANET has no problem at all paying its short term obligations.
• Looking at the Quick ratio, with a value of 3.87, ANET belongs to the top of the industry, outperforming 90.74% of the companies in the same industry.

Profitability Insights: NYSE:ANET

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:ANET was assigned a score of 9 for profitability:

• ANET's Return On Assets of 21.69% is amongst the best of the industry. ANET outperforms 98.15% of its industry peers.
• The Return On Equity of ANET (29.11%) is better than 96.30% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 23.82%, ANET belongs to the top of the industry, outperforming 96.30% of the companies in the same industry.
• ANET had an Average Return On Invested Capital over the past 3 years of 21.73%. This is significantly above the industry average of 9.55%.
• The 3 year average ROIC (21.73%) for ANET is below the current ROIC(23.82%), indicating increased profibility in the last year.
• ANET has a Profit Margin of 37.64%. This is amongst the best in the industry. ANET outperforms 100.00% of its industry peers.
• In the last couple of years the Profit Margin of ANET has grown nicely.
• ANET has a Operating Margin of 40.01%. This is amongst the best in the industry. ANET outperforms 100.00% of its industry peers.
• ANET's Operating Margin has improved in the last couple of years.
• ANET has a better Gross Margin (62.94%) than 87.04% of its industry peers.

How do we evaluate the setup for NYSE:ANET?

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, NYSE:ANET has a 7 as its setup rating, indicating its current consolidation status.

Besides having an excellent technical rating, ANET also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. A pullback is taking place, which may present a nice opportunity for an entry. There is very little resistance above the current price. There is a support zone below the current price at 303.65, a Stop Loss order could be placed below this zone.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

Check the latest full fundamental report of ANET for a complete fundamental analysis.

For an up to date full technical analysis you can check the technical report of ANET

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.