ARISTA NETWORKS INC (ANET) Stock Fundamental Analysis
NYSE:ANET - New York Stock Exchange, Inc. - US0404132054 - Common Stock - Currency: USD
Taking everything into account, ANET scores 7 out of 10 in our fundamental rating. ANET was compared to 49 industry peers in the Communications Equipment industry. ANET gets an excellent profitability rating and is at the same time showing great financial health properties. ANET is valued quite expensively, but it does show have an excellent growth rating. 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
ANET has a better Return On Assets (20.86%) than 97.96% of its industry peers.
ANET's Return On Equity of 29.93% is amongst the best of the industry. ANET outperforms 93.88% of its industry peers.
With an excellent Return On Invested Capital value of 23.94%, ANET belongs to the best of the industry, outperforming 97.96% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ANET is significantly above the industry average of 13.73%.
The last Return On Invested Capital (23.94%) for ANET is above the 3 year average (23.71%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.86% | ||
| ROE | 29.93% | ||
| ROIC | 23.94% |
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 (40.72%) than 100.00% of its industry peers.
ANET's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 42.27%, ANET belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Operating Margin of ANET has grown nicely.
ANET has a better Gross Margin (64.09%) than 87.76% of its industry peers.
ANET's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 42.27% | ||
| PM (TTM) | 40.72% | ||
| GM | 64.09% |
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.
ANET has more shares outstanding than it did 1 year ago.
The number of shares outstanding for ANET has been increased compared to 5 years ago.
There is no outstanding debt for ANET. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
ANET has an Altman-Z score of 19.31. This indicates that ANET is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ANET (19.31) is better than 97.96% of its industry peers.
There is no outstanding debt for ANET. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 19.31 |
ROIC/WACC2.45
WACC9.77%
2.3 Liquidity
A Current Ratio of 3.93 indicates that ANET has no problem at all paying its short term obligations.
With an excellent Current ratio value of 3.93, ANET belongs to the best of the industry, outperforming 81.63% of the companies in the same industry.
ANET has a Quick Ratio of 3.31. This indicates that ANET is financially healthy and has no problem in meeting its short term obligations.
ANET's Quick ratio of 3.31 is amongst the best of the industry. ANET outperforms 83.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.93 | ||
| Quick Ratio | 3.31 |
3. Growth
3.1 Past
ANET shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 29.68%, which is quite impressive.
ANET shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 30.17% yearly.
The Revenue has grown by 22.31% 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 23.77% on average per year.
EPS 1Y (TTM)29.68%
EPS 3Y46.94%
EPS 5Y30.17%
EPS Q2Q%30.65%
Revenue 1Y (TTM)22.31%
Revenue growth 3Y33.43%
Revenue growth 5Y23.77%
Sales Q2Q%27.58%
3.2 Future
Based on estimates for the next years, ANET will show a quite strong growth in Earnings Per Share. The EPS will grow by 16.25% on average per year.
ANET is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 17.22% yearly.
EPS Next Y14.77%
EPS Next 2Y15.66%
EPS Next 3Y16.75%
EPS Next 5Y16.25%
Revenue Next Year19.92%
Revenue Next 2Y18.68%
Revenue Next 3Y18.09%
Revenue Next 5Y17.22%
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.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 38.72, the valuation of ANET can be described as expensive.
ANET's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 26.59. ANET is valued slightly more expensive when compared to this.
The Price/Forward Earnings ratio is 30.82, which means the current valuation is very expensive for ANET.
ANET's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.39, ANET is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.72 | ||
| Fwd PE | 30.82 |
4.2 Price Multiples
ANET's Enterprise Value to EBITDA is on the same level as the industry average.
ANET's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.09 | ||
| EV/EBITDA | 33.44 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of ANET may justify a higher PE ratio.
ANET's earnings are expected to grow with 16.75% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.62
PEG (5Y)1.28
EPS Next 2Y15.66%
EPS Next 3Y16.75%
5. Dividend
5.1 Amount
No dividends for ANET!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
93.7
-3.1 (-3.2%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners68.57%
Inst Owner Change4.92%
Ins Owners3.65%
Ins Owner Change0.92%
Market Cap117.68B
Analysts81.94
Price Target107.96 (15.22%)
Short Float %2.36%
Short Ratio2.15
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)9.9%
Min EPS beat(2)7.74%
Max EPS beat(2)12.07%
EPS beat(4)4
Avg EPS beat(4)9.62%
Min EPS beat(4)5.76%
Max EPS beat(4)12.91%
EPS beat(8)8
Avg EPS beat(8)11.44%
EPS beat(12)12
Avg EPS beat(12)11.95%
EPS beat(16)16
Avg EPS beat(16)10.39%
Revenue beat(2)0
Avg Revenue beat(2)-0.43%
Min Revenue beat(2)-0.6%
Max Revenue beat(2)-0.26%
Revenue beat(4)2
Avg Revenue beat(4)0.33%
Min Revenue beat(4)-0.6%
Max Revenue beat(4)1.85%
Revenue beat(8)4
Avg Revenue beat(8)0.39%
Revenue beat(12)8
Avg Revenue beat(12)1.94%
Revenue beat(16)11
Avg Revenue beat(16)1.66%
PT rev (1m)-1.27%
PT rev (3m)-9.9%
EPS NQ rev (1m)7.59%
EPS NQ rev (3m)7.59%
EPS NY rev (1m)2.88%
EPS NY rev (3m)3.05%
Revenue NQ rev (1m)4.27%
Revenue NQ rev (3m)4.02%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)0.52%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.72 | ||
| Fwd PE | 30.82 | ||
| P/S | 15.82 | ||
| P/FCF | 31.09 | ||
| P/OCF | 30.68 | ||
| P/B | 11.63 | ||
| P/tB | 12.02 | ||
| EV/EBITDA | 33.44 |
EPS(TTM)2.42
EY2.58%
EPS(NY)3.04
Fwd EY3.24%
FCF(TTM)3.01
FCFY3.22%
OCF(TTM)3.05
OCFY3.26%
SpS5.92
BVpS8.06
TBVpS7.8
PEG (NY)2.62
PEG (5Y)1.28
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.86% | ||
| ROE | 29.93% | ||
| ROCE | 27.59% | ||
| ROIC | 23.94% | ||
| ROICexc | 84.09% | ||
| ROICexgc | 93.45% | ||
| OM | 42.27% | ||
| PM (TTM) | 40.72% | ||
| GM | 64.09% | ||
| FCFM | 50.9% |
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%
ROICexcg growth 3Y3.57%
ROICexcg 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 Turnover0.51
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 84.75% | ||
| Cap/Sales | 0.69% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 119.75% | ||
| Profit Quality | 125% | ||
| Current Ratio | 3.93 | ||
| Quick Ratio | 3.31 | ||
| Altman-Z | 19.31 |
F-Score6
WACC9.77%
ROIC/WACC2.45
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)29.68%
EPS 3Y46.94%
EPS 5Y30.17%
EPS Q2Q%30.65%
EPS Next Y14.77%
EPS Next 2Y15.66%
EPS Next 3Y16.75%
EPS Next 5Y16.25%
Revenue 1Y (TTM)22.31%
Revenue growth 3Y33.43%
Revenue growth 5Y23.77%
Sales Q2Q%27.58%
Revenue Next Year19.92%
Revenue Next 2Y18.68%
Revenue Next 3Y18.09%
Revenue Next 5Y17.22%
EBIT growth 1Y29.2%
EBIT growth 3Y47.12%
EBIT growth 5Y29.59%
EBIT Next Year18.97%
EBIT Next 3Y17.52%
EBIT Next 5YN/A
FCF growth 1Y515.7%
FCF growth 3Y56.94%
FCF growth 5Y31.15%
OCF growth 1Y490.03%
OCF growth 3Y53.97%
OCF growth 5Y30.95%