ARISTA NETWORKS INC (ANET) Stock Fundamental Analysis
USA - NYSE:ANET - US0404132054 - Common Stock
156.77 USD
-0.04 (-0.03%)
158 USD
+1.23 (+0.78%)
We assign a fundamental rating of 7 out of 10 to ANET. ANET was compared to 48 industry peers in the Communications Equipment industry. ANET scores excellent points on both the profitability and health parts. This is a solid base for a good stock. ANET is valued quite expensive, but it does show an excellent growth. This makes ANET very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year ANET was profitable.
ANET had a positive operating cash flow in the past year.
Each year in the past 5 years ANET has been profitable.
Each year in the past 5 years ANET had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 19.67%, ANET belongs to the top of the industry, outperforming 95.83% of the companies in the same industry.
ANET's Return On Equity of 29.83% is amongst the best of the industry. ANET outperforms 93.75% of its industry peers.
With an excellent Return On Invested Capital value of 23.84%, ANET belongs to the best of the industry, outperforming 97.92% of the companies in the same industry.
ANET had an Average Return On Invested Capital over the past 3 years of 23.71%. This is significantly above the industry average of 12.95%.
The last Return On Invested Capital (23.84%) for ANET is above the 3 year average (23.71%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.67% | ||
| ROE | 29.83% | ||
| ROIC | 23.84% |
ROA(3y)20.41%
ROA(5y)17.86%
ROE(3y)28.38%
ROE(5y)25.08%
ROIC(3y)23.71%
ROIC(5y)20.75%
1.3 Margins
ANET has a better Profit Margin (40.89%) than 100.00% of its industry peers.
In the last couple of years the Profit Margin of ANET has grown nicely.
ANET's Operating Margin of 43.14% is amongst the best of the industry. ANET outperforms 100.00% of its industry peers.
ANET's Operating Margin has improved in the last couple of years.
The Gross Margin of ANET (64.24%) is better than 87.50% of its industry peers.
In the last couple of years the Gross Margin of ANET has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 43.14% | ||
| PM (TTM) | 40.89% | ||
| GM | 64.24% |
OM growth 3Y10.26%
OM growth 5Y4.7%
PM growth 3Y12.61%
PM growth 5Y2.7%
GM growth 3Y0.17%
GM growth 5Y0.02%
2. Health
2.1 Basic Checks
ANET has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, ANET has more shares outstanding
The number of shares outstanding for ANET has been increased compared to 5 years ago.
ANET has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
ANET has an Altman-Z score of 23.55. This indicates that ANET is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ANET (23.55) is better than 95.83% of its industry peers.
ANET has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 23.55 |
ROIC/WACC2.65
WACC9.01%
2.3 Liquidity
A Current Ratio of 3.33 indicates that ANET has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 3.33, ANET belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
ANET has a Quick Ratio of 2.82. This indicates that ANET is financially healthy and has no problem in meeting its short term obligations.
ANET's Quick ratio of 2.82 is fine compared to the rest of the industry. ANET outperforms 79.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.33 | ||
| Quick Ratio | 2.82 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 31.50% over the past year.
Measured over the past years, ANET shows a very strong growth in Earnings Per Share. The EPS has been growing by 30.17% on average per year.
ANET shows a strong growth in Revenue. In the last year, the Revenue has grown by 25.97%.
The Revenue has been growing by 23.77% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)31.5%
EPS 3Y46.94%
EPS 5Y30.17%
EPS Q2Q%39.05%
Revenue 1Y (TTM)25.97%
Revenue growth 3Y33.43%
Revenue growth 5Y23.77%
Sales Q2Q%30.43%
3.2 Future
The Earnings Per Share is expected to grow by 19.41% on average over the next years. This is quite good.
The Revenue is expected to grow by 19.59% on average over the next years. This is quite good.
EPS Next Y26.08%
EPS Next 2Y21.25%
EPS Next 3Y20.86%
EPS Next 5Y19.42%
Revenue Next Year25.58%
Revenue Next 2Y22.74%
Revenue Next 3Y21.65%
Revenue Next 5Y19.59%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 59.61 indicates a quite expensive valuation of ANET.
Compared to the rest of the industry, the Price/Earnings ratio of ANET is on the same level as its industry peers.
When comparing the Price/Earnings ratio of ANET to the average of the S&P500 Index (26.83), we can say ANET is valued expensively.
The Price/Forward Earnings ratio is 46.92, which means the current valuation is very expensive for ANET.
ANET's Price/Forward Earnings is on the same level as the industry average.
ANET is valuated expensively when we compare the Price/Forward Earnings ratio to 22.88, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 59.61 | ||
| Fwd PE | 46.92 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as ANET.
The rest of the industry has a similar Price/Free Cash Flow ratio as ANET.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 49.57 | ||
| EV/EBITDA | 52.08 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ANET does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of ANET may justify a higher PE ratio.
ANET's earnings are expected to grow with 20.86% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.29
PEG (5Y)1.98
EPS Next 2Y21.25%
EPS Next 3Y20.86%
5. Dividend
5.1 Amount
No dividends for ANET!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
156.77
-0.04 (-0.03%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners69.05%
Inst Owner Change-0.04%
Ins Owners3.35%
Ins Owner Change-0.68%
Market Cap197.04B
Revenue(TTM)7.95B
Net Income(TTM)3.25B
Analysts82.42
Price Target156.27 (-0.32%)
Short Float %1.24%
Short Ratio1.5
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.98%
Min EPS beat(2)7.74%
Max EPS beat(2)10.22%
EPS beat(4)4
Avg EPS beat(4)10.73%
Min EPS beat(4)7.74%
Max EPS beat(4)12.91%
EPS beat(8)8
Avg EPS beat(8)11.75%
EPS beat(12)12
Avg EPS beat(12)11.47%
EPS beat(16)16
Avg EPS beat(16)10.73%
Revenue beat(2)1
Avg Revenue beat(2)1.15%
Min Revenue beat(2)-0.26%
Max Revenue beat(2)2.55%
Revenue beat(4)2
Avg Revenue beat(4)0.89%
Min Revenue beat(4)-0.6%
Max Revenue beat(4)2.55%
Revenue beat(8)4
Avg Revenue beat(8)0.24%
Revenue beat(12)8
Avg Revenue beat(12)1.68%
Revenue beat(16)11
Avg Revenue beat(16)1.77%
PT rev (1m)4.62%
PT rev (3m)41.52%
EPS NQ rev (1m)-0.08%
EPS NQ rev (3m)13.99%
EPS NY rev (1m)0.07%
EPS NY rev (3m)9.57%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)6.59%
Revenue NY rev (1m)0%
Revenue NY rev (3m)4.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 59.61 | ||
| Fwd PE | 46.92 | ||
| P/S | 24.78 | ||
| P/FCF | 49.57 | ||
| P/OCF | 48.69 | ||
| P/B | 18.07 | ||
| P/tB | 18.79 | ||
| EV/EBITDA | 52.08 |
EPS(TTM)2.63
EY1.68%
EPS(NY)3.34
Fwd EY2.13%
FCF(TTM)3.16
FCFY2.02%
OCF(TTM)3.22
OCFY2.05%
SpS6.33
BVpS8.67
TBVpS8.34
PEG (NY)2.29
PEG (5Y)1.98
Graham Number22.66
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.67% | ||
| ROE | 29.83% | ||
| ROCE | 27.48% | ||
| ROIC | 23.84% | ||
| ROICexc | 81.79% | ||
| ROICexgc | 92.37% | ||
| OM | 43.14% | ||
| PM (TTM) | 40.89% | ||
| GM | 64.24% | ||
| FCFM | 50% |
ROA(3y)20.41%
ROA(5y)17.86%
ROE(3y)28.38%
ROE(5y)25.08%
ROIC(3y)23.71%
ROIC(5y)20.75%
ROICexc(3y)67.83%
ROICexc(5y)64.95%
ROICexgc(3y)77.58%
ROICexgc(5y)79.18%
ROCE(3y)27.32%
ROCE(5y)23.92%
ROICexgc growth 3Y3.57%
ROICexgc growth 5Y0.83%
ROICexc growth 3Y8.79%
ROICexc growth 5Y0.97%
OM growth 3Y10.26%
OM growth 5Y4.7%
PM growth 3Y12.61%
PM growth 5Y2.7%
GM growth 3Y0.17%
GM growth 5Y0.02%
F-Score6
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 124.95% | ||
| Cap/Sales | 0.9% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 116.05% | ||
| Profit Quality | 122.26% | ||
| Current Ratio | 3.33 | ||
| Quick Ratio | 2.82 | ||
| Altman-Z | 23.55 |
F-Score6
WACC9.01%
ROIC/WACC2.65
Cap/Depr(3y)57.2%
Cap/Depr(5y)66.94%
Cap/Sales(3y)0.69%
Cap/Sales(5y)0.98%
Profit Quality(3y)85.94%
Profit Quality(5y)96.87%
High Growth Momentum
Growth
EPS 1Y (TTM)31.5%
EPS 3Y46.94%
EPS 5Y30.17%
EPS Q2Q%39.05%
EPS Next Y26.08%
EPS Next 2Y21.25%
EPS Next 3Y20.86%
EPS Next 5Y19.42%
Revenue 1Y (TTM)25.97%
Revenue growth 3Y33.43%
Revenue growth 5Y23.77%
Sales Q2Q%30.43%
Revenue Next Year25.58%
Revenue Next 2Y22.74%
Revenue Next 3Y21.65%
Revenue Next 5Y19.59%
EBIT growth 1Y31.8%
EBIT growth 3Y47.12%
EBIT growth 5Y29.59%
EBIT Next Year29.88%
EBIT Next 3Y22%
EBIT Next 5Y23.37%
FCF growth 1Y320.65%
FCF growth 3Y56.94%
FCF growth 5Y31.15%
OCF growth 1Y311.66%
OCF growth 3Y53.97%
OCF growth 5Y30.95%
ARISTA NETWORKS INC / ANET FAQ
What is the ChartMill fundamental rating of ARISTA NETWORKS INC (ANET) stock?
ChartMill assigns a fundamental rating of 7 / 10 to ANET.
What is the valuation status for ANET stock?
ChartMill assigns a valuation rating of 3 / 10 to ARISTA NETWORKS INC (ANET). This can be considered as Overvalued.
What is the profitability of ANET stock?
ARISTA NETWORKS INC (ANET) has a profitability rating of 9 / 10.
How financially healthy is ARISTA NETWORKS INC?
The financial health rating of ARISTA NETWORKS INC (ANET) is 9 / 10.
What is the earnings growth outlook for ARISTA NETWORKS INC?
The Earnings per Share (EPS) of ARISTA NETWORKS INC (ANET) is expected to grow by 26.08% in the next year.