One-glance verdict
Overvalued
$98.82 our estimate vs market $181.05
Wall Street consensus: $190.09 (92.4% higher than our fair-value estimate)
83% above our estimate, beyond the bull case
Fundamentals snapshot
Arista Networks, Inc.
ANET · NYQ · Technology · Computer Hardware
Current price
$181.05
52-week range
$102.68 - $181.27
Market cap
$227.97B
Balance sheet
Healthy
10.06x Adequate
Net cash $12.35B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 7.8% last year.
- Reward Returns 31.5% on equity, ahead of 80% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 54.2% above its 5-year average P/E.
What this company does
Arista Networks, Inc.
Arista Networks sells high-performance networking equipment, like the switches and software that act as a super-fast traffic control system for the internet and cloud computing. The company primarily makes money by selling this advanced gear to huge data centers and cloud providers who need to handle massive amounts of information for services like artificial intelligence. As our world relies more on AI and cloud-based applications, the demand for Arista's specialized "plumbing" to manage all that data traffic grows with it.
How the company got here
Founded in 2004 by networking industry veterans, Arista Networks aimed to build faster and more efficient equipment for the growing needs of large data centers. A key moment was the 2008 launch of their Extensible Operating System (EOS), a single software brain that runs across all their hardware, which simplified network management. The company went public in 2014 and has become a major player by focusing on high-performance products for giant cloud companies and, more recently, the intense computing demands of Artificial Intelligence (AI).
What it actually does
Imagine the internet as a giant city with information constantly moving around. Arista Networks builds the super-fast roads and traffic control systems for the busiest parts of this city, like massive data centers that power cloud services and AI. They sell physical hardware called switches, which are like incredibly fast and smart traffic cops that direct data where it needs to go. All this hardware is controlled by their special software, which makes managing a huge, complex network much simpler.
Products
This is Arista's main business, making up the vast majority of its revenue. The company sells high-performance physical switches and other networking hardware that data centers and large companies use to connect thousands of computers together. Customers like cloud providers and financial services companies pay for this equipment to build fast, reliable networks that can handle huge amounts of data. This segment is the foundation of the company, providing the essential hardware for modern digital infrastructure.
Services
This is a smaller but growing part of Arista's business, representing about 15% of total sales. After a customer buys Arista's hardware, they can also pay for ongoing support and services. This includes technical help, hardware repairs, and software updates to keep their networks running smoothly and securely. Think of it as an extended warranty and expert maintenance plan for the powerful networking equipment they've purchased.
What management is betting on now
Arista is heavily focused on the explosive growth of Artificial Intelligence (AI), which requires extremely fast and powerful networks to process massive amounts of data. They are also pushing to expand beyond their core data center market into corporate office networks, often called the 'campus' market, to diversify their customer base. A key part of their strategy is championing open standards, which means their equipment is designed to work well with products from other companies, giving customers more flexibility. Management believes these bets on AI, enterprise campus networks, and open systems will drive future growth.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$985.85M
FY2024 Q3
$1.17B
FY2024 Q4
$998.93M
FY2025 Q1
$613.30M
FY2025 Q2
$1.18B
FY2025 Q3
$1.24B
FY2025 Q4
$1.14B
FY2026 Q1
$1.64B
Revenue
$2.71B
Net income
$1.02B
Diluted EPS
0.80
Operating cash flow
$1.69B
Free cash flow
$1.64B
Fetching…
Sources
Revenue
$2.49B
Net income
$955.80M
Diluted EPS
0.74
Operating cash flow
$1.26B
Free cash flow
$1.14B
Fetching…
Sources
Revenue
$2.31B
Net income
$853.00M
Diluted EPS
0.67
Operating cash flow
$1.27B
Free cash flow
$1.24B
Fetching…
Sources
Revenue
$2.20B
Net income
$888.80M
Diluted EPS
0.70
Operating cash flow
$1.20B
Free cash flow
$1.18B
Fetching…
Sources
Revenue
$2.00B
Net income
$813.80M
Diluted EPS
0.64
Operating cash flow
$641.70M
Free cash flow
$613.30M
Fetching…
Sources
Revenue
$1.93B
Net income
$801.00M
Diluted EPS
-4.17
Operating cash flow
$1.03B
Free cash flow
$998.93M
Fetching…
Sources
Revenue
$1.81B
Net income
$747.94M
Diluted EPS
2.33
Operating cash flow
$1.17B
Free cash flow
$1.17B
Fetching…
Sources
Revenue
$1.69B
Net income
$665.43M
Diluted EPS
2.08
Operating cash flow
$989.01M
Free cash flow
$985.85M
Fetching…
Sources
Is it cheap or expensive?
Fair value $98.82 vs current price $181.05
Wall Street consensus is the average analyst price target: $190.09 (92.4% higher than our fair-value estimate).
Our most-likely fair value is $98.82 a share — about 45.4% below today's price of $181.05, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $12.4B - more cash than debt. Interest coverage 10.1x.
Net debt
$-12.35B
Interest coverage
10.06x
Arista Networks, Inc.'s profit covers its interest bill about 10.1 times over. which is stronger than most peers shown here.
Healthy
Worse cushion
Baseline
Better cushion
ANET
BASELINE
Arista Networks, Inc.
Total debt $0.00 Interest coverage 10.06x This is the baseline the peer rows are being compared against.
Total debt $33.00B Interest coverage 7.85x -22% vs ANET Carries about 1.3x less debt cushion than ANET.
Total debt $21.30B Interest coverage 14.05x +40% vs ANET Carries about 1.4x more debt cushion than ANET.
Total debt $1.58B Interest coverage 3.39x -66% vs ANET Carries about 3.0x less debt cushion than ANET.
What you should know
The case for and against ANET
3 Rewards
1 Risk
Rewards
-
Revenue grew 7.8% last year.
-
Returns 31.5% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 54.2% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
62.22x
Forward P/E
40.65x
P/B
16.90x
P/S
23.48x
EV/EBITDA
50.89x
PEG ratio
2.21x
Profitability
How much profit each dollar creates
Gross margin
63.5%
Operating margin
42.7%
Net margin
38.3%
ROE
31.5%
ROA
14.4%
Health
Liquidity and balance-sheet strength
Debt / equity
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Current ratio
2.83x
Quick ratio
2.18x
Total debt
$0.00
Total cash
$12.35B
Growth
How the business has been compounding
Revenue TTM
$9.71B
Revenue 5Y CAGR
32.2%
EPS TTM
2.91
EPS 5Y CAGR
37.1%
Cash flow
How much cash the business throws off
Operating CF TTM
$5.42B
Free CF TTM
$4.25B
FCF margin
43.8%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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