ANETANET
US • TECHNOLOGY
$173.99
P/E
59.59
PEG
2.38
FCF Yield
2.3%
Rev Growth YoY
+35.1% YoY
Gross Margin
63.5%
Health Score
9/10
D/E Ratio
—
Confidence
MEDIUM
Business Snapshot
Arista Networks is a provider of cloud networking solutions, primarily focusing on high-speed data center switches and software-driven network automation. The company operates in the data center switching market, competing against established players like Cisco and emerging as a dominant force in the 100G and 400G Ethernet switching segments. As a large-cap company with a market capitalisation of $222.38B, Arista generated $9.71 billion in trailing twelve-month revenue, reflecting substantial financial scale within its industry. A defining characteristic of Arista is its software-centric Extensible Operating System (EOS), which creates a recurring software subscription revenue stream and enables rapid network automation for large-scale cloud and enterprise customers.
Financial Health
Gross margin stands at 63.5%, while net margin is a robust 38.3%, indicating exceptional profitability and pricing power. The balance sheet is a fortress, with a debt-to-equity ratio of 0.0x and a current ratio of 3.05x, demonstrating no reliance on debt and ample short-term liquidity...
Risk Assessment
- VALUATION — P/E of 59.59x is substantially elevated versus the sector average of 22x, requiring sustained high growth to justify the premium.
- VALUATION DIVERGENCE — The Python DCF estimate of $92.66 is significantly below the current price of $173.99, suggesting the market is pricing in a much higher growth trajectory than the model assumes.
- INSIDER SELLING — 9 insider sells versus 0 buys over the last 90 days signals caution, as company executives are reducing their personal holdings.
- TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed....
Gross margin stands at 63.5%, while net margin is a robust 38.3%, indicating exceptional profitability and pricing power. The balance sheet is a fortress, with a debt-to-equity ratio of 0.0x and a current ratio of 3.05x, demonstrating no reliance on debt and ample short-term liquidity. Free cash flow is a significant $5.20 billion, translating to a free cash flow yield of 2.3%, confirming the company generates substantial cash after capital expenditures. Overall financial health is outstanding, providing significant capacity for reinvestment in research and development, potential acquisitions, and returning capital to shareholders.
- VALUATION — P/E of 59.59x is substantially elevated versus the sector average of 22x, requiring sustained high growth to justify the premium. - VALUATION DIVERGENCE — The Python DCF estimate of $92.66 is significantly below the current price of $173.99, suggesting the market is pricing in a much higher growth trajectory than the model assumes. - INSIDER SELLING — 9 insider sells versus 0 buys over the last 90 days signals caution, as company executives are reducing their personal holdings. - TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed.
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