ARISTA NETWORKS INC (NYSE:ANET) – A Strong Contender for CANSLIM Investors

ARISTA NETWORKS INC (NYSE:ANET) stands out as a potential candidate for investors following the CANSLIM strategy. The company’s strong earnings growth, high profitability, and solid technical setup align well with the criteria outlined by William O’Neil’s methodology. Below, we examine why ANET fits the CANSLIM approach.

Key CANSLIM Criteria Met by ANET

• Earnings Growth (C & A):

  • Quarterly EPS growth of 30.65% (vs. same quarter last year) exceeds the CANSLIM threshold of 20%.
  • Revenue growth for the same period came in at 27.58%, reinforcing strong demand.
  • Over the past three years, EPS has grown at an annualized rate of 46.94%, well above the 25% minimum suggested by O’Neil.

• Profitability & Financial Health:

  • Return on Equity (ROE) stands at 29.93%, indicating efficient use of shareholder capital.
  • The company carries no debt, a rare strength that enhances financial stability.
  • Operating margins of 42.27% and net margins of 40.72% rank among the best in the communications equipment industry.

• Relative Strength & Market Leadership (L):

  • ANET’s relative strength score of 77.05 places it in the top quartile of stocks, a key CANSLIM requirement.
  • While the stock has pulled back from highs, the long-term uptrend remains intact, and short-term momentum is positive.

• Institutional Sponsorship (I):

  • Institutional ownership sits at 69.59%, below the 85% threshold, suggesting room for further institutional accumulation.

Technical Outlook

ANET’s chart shows consolidation near key support levels, with resistance around $95-98. A breakout above this zone could signal renewed upward momentum. The stock’s setup quality score of 6 indicates a potential entry point for traders.

For a deeper dive, review the full technical analysis report and fundamental analysis report.

Our CANSLIM High Growth screener lists additional stocks meeting these criteria.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should conduct your own research before making investment decisions.