ARISTA NETWORKS INC (ANET) Stock Fundamental Analysis
NYSE:ANET - New York Stock Exchange, Inc. - US0404132054 - Common Stock - Currency: USD
ANET gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 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. With these ratings, ANET could be worth investigating further for growth and quality investing!.
1. Profitability
1.1 Basic Checks
ANET had positive earnings in the past year.
ANET had a positive operating cash flow in the past year.
ANET had positive earnings in each of the past 5 years.
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 20.31%, ANET belongs to the top of the industry, outperforming 97.96% of the companies in the same industry.
The Return On Equity of ANET (28.54%) is better than 93.88% of its industry peers.
ANET has a Return On Invested Capital of 22.59%. This is amongst the best in the industry. ANET outperforms 95.92% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ANET is significantly above the industry average of 11.13%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.31% | ||
| ROE | 28.54% | ||
| ROIC | 22.59% |
ROA(3y)20.42%
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 Profit Margin of 40.73%. This is amongst the best in the industry. ANET outperforms 100.00% of its industry peers.
ANET's Profit Margin has improved in the last couple of years.
ANET has a Operating Margin of 42.05%. This is amongst the best in the industry. ANET outperforms 100.00% of its industry peers.
In the last couple of years the Operating Margin of ANET has grown nicely.
ANET's Gross Margin of 64.13% is amongst the best of the industry. ANET outperforms 85.71% of its industry peers.
ANET's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 42.05% | ||
| PM (TTM) | 40.73% | ||
| GM | 64.13% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ANET 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
An Altman-Z score of 17.75 indicates that ANET is not in any danger for bankruptcy at the moment.
ANET has a Altman-Z score of 17.75. This is amongst the best in the industry. ANET outperforms 100.00% 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 | 17.75 |
ROIC/WACC2.4
WACC9.43%
2.3 Liquidity
ANET has a Current Ratio of 4.36. This indicates that ANET is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 4.36, ANET belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
A Quick Ratio of 3.69 indicates that ANET has no problem at all paying its short term obligations.
ANET has a Quick ratio of 3.69. This is amongst the best in the industry. ANET outperforms 89.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.36 | ||
| Quick Ratio | 3.69 |
3. Growth
3.1 Past
ANET shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 31.36%, which is quite impressive.
The Earnings Per Share has been growing by 30.17% on average over the past years. This is a very strong growth
Looking at the last year, ANET shows a quite strong growth in Revenue. The Revenue has grown by 19.50% in the last year.
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)31.36%
EPS 3Y46.94%
EPS 5Y30.17%
EPS Q2Q%25%
Revenue 1Y (TTM)19.5%
Revenue growth 3Y33.43%
Revenue growth 5Y23.77%
Sales Q2Q%25.32%
3.2 Future
ANET is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.79% yearly.
Based on estimates for the next years, ANET will show a quite strong growth in Revenue. The Revenue will grow by 17.53% on average per year.
EPS Next Y11.56%
EPS Next 2Y14.78%
EPS Next 3Y16.02%
EPS Next 5Y16.79%
Revenue Next Year19.4%
Revenue Next 2Y18.51%
Revenue Next 3Y18.32%
Revenue Next 5Y17.53%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of 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
A Price/Earnings ratio of 36.24 indicates a quite expensive valuation of ANET.
Compared to the rest of the industry, the Price/Earnings ratio of ANET indicates a somewhat cheap valuation: ANET is cheaper than 61.22% of the companies listed in the same industry.
ANET's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 28.98.
Based on the Price/Forward Earnings ratio of 32.45, the valuation of ANET can be described as expensive.
ANET's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.38, ANET is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.24 | ||
| Fwd PE | 32.45 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ANET is on the same level as its industry peers.
The rest of the industry has a similar Price/Free Cash Flow ratio as ANET.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.1 | ||
| EV/EBITDA | 29.11 |
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.
A more expensive valuation may be justified as ANET's earnings are expected to grow with 16.02% in the coming years.
PEG (NY)3.14
PEG (5Y)1.2
EPS Next 2Y14.78%
EPS Next 3Y16.02%
5. Dividend
5.1 Amount
ANET does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
82.27
+1.54 (+1.91%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners68.57%
Inst Owner Change0.8%
Ins Owners3.65%
Ins Owner Change0.36%
Market Cap103.30B
Analysts81.33
Price Target110.32 (34.1%)
Short Float %2.01%
Short Ratio1.65
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)12.49%
Min EPS beat(2)12.07%
Max EPS beat(2)12.91%
EPS beat(4)4
Avg EPS beat(4)10.7%
Min EPS beat(4)5.76%
Max EPS beat(4)12.91%
EPS beat(8)8
Avg EPS beat(8)11.02%
EPS beat(12)12
Avg EPS beat(12)11.46%
EPS beat(16)16
Avg EPS beat(16)10.09%
Revenue beat(2)1
Avg Revenue beat(2)0.63%
Min Revenue beat(2)-0.6%
Max Revenue beat(2)1.85%
Revenue beat(4)2
Avg Revenue beat(4)0.26%
Min Revenue beat(4)-0.6%
Max Revenue beat(4)1.85%
Revenue beat(8)5
Avg Revenue beat(8)0.6%
Revenue beat(12)9
Avg Revenue beat(12)2.01%
Revenue beat(16)12
Avg Revenue beat(16)1.8%
PT rev (1m)-7.93%
PT rev (3m)0.15%
EPS NQ rev (1m)0.09%
EPS NQ rev (3m)5.37%
EPS NY rev (1m)-0.31%
EPS NY rev (3m)1.14%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)3.77%
Revenue NY rev (1m)0.08%
Revenue NY rev (3m)0.47%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.24 | ||
| Fwd PE | 32.45 | ||
| P/S | 14.75 | ||
| P/FCF | 28.1 | ||
| P/OCF | 27.86 | ||
| P/B | 10.34 | ||
| P/tB | 10.69 | ||
| EV/EBITDA | 29.11 |
EPS(TTM)2.27
EY2.76%
EPS(NY)2.54
Fwd EY3.08%
FCF(TTM)2.93
FCFY3.56%
OCF(TTM)2.95
OCFY3.59%
SpS5.58
BVpS7.96
TBVpS7.7
PEG (NY)3.14
PEG (5Y)1.2
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.31% | ||
| ROE | 28.54% | ||
| ROCE | 26.03% | ||
| ROIC | 22.59% | ||
| ROICexc | 84.93% | ||
| ROICexgc | 95.42% | ||
| OM | 42.05% | ||
| PM (TTM) | 40.73% | ||
| GM | 64.13% | ||
| FCFM | 52.49% |
ROA(3y)20.42%
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 Turnover0.5
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 51.63% | ||
| Cap/Sales | 0.46% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 123.33% | ||
| Profit Quality | 128.9% | ||
| Current Ratio | 4.36 | ||
| Quick Ratio | 3.69 | ||
| Altman-Z | 17.75 |
F-Score6
WACC9.43%
ROIC/WACC2.4
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)31.36%
EPS 3Y46.94%
EPS 5Y30.17%
EPS Q2Q%25%
EPS Next Y11.56%
EPS Next 2Y14.78%
EPS Next 3Y16.02%
EPS Next 5Y16.79%
Revenue 1Y (TTM)19.5%
Revenue growth 3Y33.43%
Revenue growth 5Y23.77%
Sales Q2Q%25.32%
Revenue Next Year19.4%
Revenue Next 2Y18.51%
Revenue Next 3Y18.32%
Revenue Next 5Y17.53%
EBIT growth 1Y30.45%
EBIT growth 3Y47.12%
EBIT growth 5Y29.59%
EBIT Next Year16.97%
EBIT Next 3Y18.72%
EBIT Next 5YN/A
FCF growth 1Y83.85%
FCF growth 3Y56.94%
FCF growth 5Y31.15%
OCF growth 1Y82.31%
OCF growth 3Y53.97%
OCF growth 5Y30.95%