Arista Networks (ANET) AI Stock Analysis

• Market Cap: $168.76B
• Dividend Yield: N/A
• Average Volume (3M): 8.97M
• Price to Earnings (P/E): 52.8
• Beta (1Y): 2.34
• Revenue Growth: 25.97%
• EPS Growth: 31.05%
• Country: US
• Employees: 4,412
• Sector: Technology
• Sector Strength: 85
• Industry: Computer Hardware
• EPS (TTM): 0.73
• Shares Outstanding: 1,256,865,400
• 10 Day Avg. Volume: 7,273,622
• 30 Day Avg. Volume: 8,969,997
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.72
• Enterprise Value/Revenue: 15.24
• Enterprise Value/Gross Profit: 23.73
• Enterprise Value/Ebitda: 33.84
• 1Y Price Target: $147.60
• Price Target Upside: 9.93% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 20

• Rating: 83 Outperform
• Price Target: $162.00 ▲(20.65% Upside)

Arista Networks' strong financial performance and positive earnings outlook are the most significant factors driving the high stock score. While technical indicators show bullish momentum, the high valuation suggests caution. The company's strategic focus on AI and cloud sectors supports its growth trajectory.

Positive Factors

Earnings Performance

Arista reported a strong second quarter, beating consensus across the top and bottom lines and delivering third-quarter guidance that was also ahead of Street expectations.

International Expansion

The company's revenue in the EMEA region saw a substantial increase of 58% year-over-year, highlighting impressive international growth.

Revenue Growth

ANET's total remaining performance obligations (RPO) balance increased significantly to approximately $4.7 billion, indicating strong future revenue potential.

Negative Factors

Growth Deceleration

Risks are mainly associated with growth deceleration expected in 2026, with management preliminary forecasting 14% growth to $10bn vs. 25% growth in 2025E.

Growth Risks

Elevated risk levels are flagged, related to capex slowdown next year, competitive risks, limited margin upside and a high valuation multiple of 40x 2026 P/E.

Profit Margins

The company guided a slight decrease in gross margins and operating margins in the third quarter, leaving room for potential tariff impacts as well as an uptick in expenses.

Arista Networks Business Overview & Revenue Model

Company Description

Arista Networks, Inc. develops, markets, and sells cloud networking solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. The company's cloud networking solutions consist of extensible operating systems, a set of network applications, as well as gigabit Ethernet switching and routing platforms. It also provides post contract customer support services, such as technical support, hardware repair and parts replacement beyond standard warranty, bug fix, patch, and upgrade services. The company serves a range of industries comprising internet companies, service providers, financial services organizations, government agencies, media and entertainment companies, and others. It markets and sells its products through distributors, system integrators, value-added resellers, and original equipment manufacturer partners, as well as through its direct sales force. The company was formerly known as Arastra, Inc. and changed its name to Arista Networks, Inc. in October 2008. Arista Networks, Inc. was incorporated in 2004 and is headquartered in Santa Clara, California.

How the Company Makes Money

Arista Networks generates revenue primarily through the sale of its networking hardware and software solutions. The company's key revenue streams include the sale of Ethernet switches, which are integral to data centers and cloud networking infrastructures. Additionally, Arista offers software solutions, primarily through its Extensible Operating System (EOS), which provides network management and automation capabilities. The company also earns revenue from customer support and services, which include maintenance and upgrades. Arista's strong relationships with large-scale cloud service providers, enterprise data centers, and financial institutions also contribute significantly to its earnings, as these sectors require robust and scalable networking solutions.

Arista Networks Financial Statement Overview

Summary

Arista Networks exhibits strong financial performance with impressive revenue growth, high profit margins, and effective cash management. The company maintains a solid balance sheet with no debt and high return on equity, reflecting financial stability and operational efficiency.

Income Statement

Arista Networks has demonstrated impressive revenue growth with a robust revenue increase of 19.5% from 2023 to 2024. The company maintains a strong gross profit margin of 64.1%, and a net profit margin of 40.7%, showcasing effective cost management and profitability. Both EBIT and EBITDA margins are healthy at 42.1%, reflecting operational efficiency. These metrics highlight Arista Networks' strong financial performance and competitive positioning in the market.

Balance Sheet

The company has a solid balance sheet with no debt and a strong equity standing, resulting in a favorable debt-to-equity ratio of 0.0. The return on equity is remarkable at 28.5%, indicating efficient use of equity capital to generate profits. The equity ratio of 71.2% further underlines financial stability and low leverage risk, making Arista Networks a financially sound company.

Cash Flow

Arista Networks exhibits strong cash flow management with a significant free cash flow growth rate of 83.8%. The operating cash flow to net income ratio is robust at 1.3, demonstrating effective cash generation relative to net income. The free cash flow to net income ratio is also strong at 1.3, indicating efficient conversion of income to cash. These metrics highlight the company’s ability to generate and manage cash effectively.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.95B	7.00B	5.86B	4.38B	2.95B	2.32B
Gross Profit	5.11B	4.49B	3.63B	2.68B	1.88B	1.48B
EBITDA	3.58B	3.01B	2.33B	1.59B	975.07M	734.84M
Net Income	3.25B	2.85B	2.09B	1.35B	840.85M	634.56M
Balance Sheet
Total Assets	16.53B	14.04B	9.96B	6.78B	5.73B	4.74B
Cash, Cash Equivalents and Short-Term Investments	8.84B	8.30B	5.01B	3.02B	3.41B	2.87B
Total Debt	0.00	0.00	0.00	43.96M	56.53M	72.40M
Total Liabilities	5.63B	4.05B	2.74B	1.89B	1.76B	1.42B
Stockholders Equity	10.90B	9.99B	7.22B	4.89B	3.98B	3.32B
Cash Flow
Free Cash Flow	3.98B	3.68B	2.00B	448.17M	951.12M	719.73M
Operating Cash Flow	4.05B	3.71B	2.03B	492.81M	1.02B	735.11M
Investing Cash Flow	-3.07B	-2.46B	-687.45M	216.33M	-925.56M	-608.80M
Financing Cash Flow	-1.18B	-421.81M	-83.75M	-654.60M	-360.88M	-346.34M

Arista Networks Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 134.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ANET, the sentiment is Positive. The current price of 134.27 is above the 20-day moving average (MA) of 132.21, above the 50-day MA of 115.34, and above the 200-day MA of 101.29, indicating a bullish trend. The MACD of 5.32 indicates Positive momentum. The RSI at 61.91 is Neutral, neither overbought nor oversold. The STOCH value of 46.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ANET.

Arista Networks Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ANET	83 Outperform	$168.76B	52.80	33.64%	―	25.97%	31.05%
CSCO	80 Outperform	$270.82B	25.72	22.58%	2.37%	5.30%	3.07%
PSTG	77 Outperform	$19.14B	157.59	9.76%	―	10.85%	30.85%
JNPR	71 Outperform		―		―	-2.56%	52.05%
DELL	67 Neutral	$88.92B	20.89	-179.12%	1.48%	7.68%	27.73%
SMCI	66 Neutral	$26.30B	26.59	17.90%	―	47.04%	-17.89%
Sector *	61 Neutral	$35.62B	8.22	-10.94%	1.88%	8.86%	-10.36%

Arista Networks Corporate Events

Arista Networks Appoints Todd Nightingale as COO

On June 13, 2025, Arista Networks announced the appointment of Todd Nightingale as President and Chief Operating Officer, effective around July 1, 2025. This strategic move is expected to enhance the company’s leadership team, given Nightingale’s extensive experience at Fastly, Inc. and Cisco Systems, Inc. The appointment includes a comprehensive compensation package with salary, bonuses, and stock options, reflecting the company’s commitment to securing top executive talent to drive its growth and market positioning.

The most recent analyst rating on (ANET) stock is a Buy with a $96.25 price target. To see the full list of analyst forecasts on Arista Networks stock, see the ANET Stock Forecast page.

Arista Networks Holds Annual Stockholders Meeting

On May 30, 2025, Arista Networks held its Annual Meeting of Stockholders where key proposals were voted on. The stockholders elected three Class II directors to serve until 2028, approved the compensation of the company’s named executive officers, and ratified the appointment of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.

The most recent analyst rating on (ANET) stock is a Buy with a $96.25 price target. To see the full list of analyst forecasts on Arista Networks stock, see the ANET Stock Forecast page.