Arista Networks, Inc. (ANET) stock analysis

P/E above its 5-year median

Arista Networks's P/E of 52.9 is above its own 5-year median of 44.7.

P/E above the industry

Arista Networks's P/E of 52.9 is above the Computer and Office Equipment median of 26.0.

EV/EBITDA above its 5-year median

Arista Networks's EV/EBITDA of 44.1 is above its 5-year median of 36.9.

P/B above the industry

Arista Networks's price-to-book of 15.08 is above the Computer and Office Equipment median of 3.71.

Trading above fair value

The share price of $196.68 is above our fair value estimate of $131.44.

Margin of safety under 20%

The price is 49.6% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 27.1% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 37.0% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 41.6% over the last twelve months, against a 5-year average of 40.8% a year.

Growing faster than the industry

Revenue grew 40.7% over the last twelve months; the Computer and Office Equipment median is 11.2%.

Guidance issued

The latest outlook (fourth quarter of 2026 Non-GAAP diluted net income per share, Nov 3, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin slipping

Gross margin was 62.9% over the last twelve months, against 64.3% a year earlier.

Return on equity over 15%

Return on equity was 33.5% over the last twelve months and averaged 30.5% over five years.

Return on capital over 10%

Return on invested capital was 219%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Arista Networks's return on equity of 33.5% is above the Computer and Office Equipment median of 7.5%.

Earnings grew over 5 years

Net income grew 40.8% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 40.0% over the last twelve months, against a 5-year average of 34.9%.

Net margin above the industry

Arista Networks's net margin of 40.0% is above the Computer and Office Equipment median of 3.8%.

No debt

Arista Networks has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 3.29 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 19.50; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Arista Networks has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.