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Arista Networks
(NYSE:ANET)
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Rating:86Outperform
Price Target:
$225.00
▲(29.32% Upside)
Action:Reiterated
Date:08/05/26
ANET scores highly primarily due to exceptional financial performance (strong margins, cash generation, and a debt-light balance sheet) reinforced by a very upbeat earnings outlook with raised FY2026 guidance. Technicals support the score with a strong uptrend, though near-overbought signals add some short-term risk. The main offset is valuation: a high P/E increases sensitivity to any slowdown, margin pressure, or working-capital volatility highlighted by management.
Positive Factors
Cash generation quality
Near-parity free cash flow and net income demonstrates high earnings quality and durable internal funding. Strong FCF supports sustained R&D, product investment, and capital allocation flexibility, lowering reliance on external financing and providing a lasting cushion through cyclical demand shifts.
Negative Factors
Persistent supply-chain tightness
Ongoing component scarcity and limited customer visibility are structural constraints that can cap shipment ability, force expensive sourcing choices, and lengthen lead times. Over a multi-quarter horizon this reduces planning accuracy, can inflate procurement costs, and pressure margins and customer fulfillment.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation quality
Near-parity free cash flow and net income demonstrates high earnings quality and durable internal funding. Strong FCF supports sustained R&D, product investment, and capital allocation flexibility, lowering reliance on external financing and providing a lasting cushion through cyclical demand shifts.
Read all positive factors
Arista Networks Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where Arista Networks is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where Arista Networks is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyArista Networks (ANET) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$227.10B
Dividend YieldN/A
Average Volume (3M)7.68M
Price to Earnings (P/E)60.9
Beta (1Y)2.06
Revenue Growth30.57%
EPS Growth22.96%
CountryUS
Employees5,115
SectorTechnology
Sector Strength88
IndustryComputer Hardware
Share Statistics
EPS (TTM)3.21
Shares Outstanding1,259,202,600
10 Day Avg. Volume6,555,635
30 Day Avg. Volume7,680,102
Financial Highlights & Ratios
PEG Ratio2.05
Price to Book (P/B)13.32
Price to Sales (P/S)18.30
P/FCF Ratio38.76
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$242.56Price Target Upside39.41% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering18
EPS Forecast (FY)3.64
Revenue Forecast (FY)$11.62B
Arista Networks Business Overview & Revenue Model
Company Description
Arista Networks, Inc. (ANET) designs, manufactures, and sells data-driven networking solutions primarily for large-scale data centers, cloud computing environments, and enterprise networks. The company’s core offerings include high-performance Eth...
How the Company Makes Money
Arista makes money primarily by selling networking hardware and related software and support to cloud and enterprise customers.
1) Product revenue (hardware and software bundled with hardware)
- The largest portion of Arista’s revenue historicall...
Arista Networks Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 02, 2026
Earnings Call Sentiment Positive
The call presented a strongly positive operational and financial picture: record quarterly revenue, robust profitability (near-50% operating margin), large cash balance and accelerated FY2026 revenue guidance to $12.6B driven by AI momentum and product innovation. Management also outlined meaningful supply-chain remediation progress (multiyear commitments, vendor qualification, added manufacturing/distribution capacity) and expanding international sales. Key risks highlighted include ongoing industry supply tightness with limited visibility (~2 quarters), YoY gross margin decline driven by mix and rising memory/silicon costs, elevated inventory and large purchase commitments that can strain near-term cash flow dynamics. Overall, the positives (revenue/guidance beat, margin targets, AI customer traction and product road map) materially outweigh the lowlights (supply constraints, margin pressure and working capital volatility).Positive Updates
Record Quarterly Revenue
Total revenue for Q2 FY2026 was just over $3.0 billion, marking the company's first $3 billion quarter and representing 37.7% year-over-year growth (above guidance of $2.8 billion).
Negative Updates
Gross Margin Pressure Year-over-Year
GAAP/non-GAAP gross margin for Q2 was 63.4%, down from 65.6% in the prior year (a decline of ~220 basis points YoY). Management attributed mix and supply-chain cost increases (memory and silicon) as drivers.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Revenue
Total revenue for Q2 FY2026 was just over $3.0 billion, marking the company's first $3 billion quarter and representing 37.7% year-over-year growth (above guidance of $2.8 billion).
Read all positive updates
Company Guidance
Arista raised fiscal 2026 revenue guidance to approximately $12.6 billion (implying ~40% YoY growth and about $2.1B above the Analyst Day $10.5B target and $1.1B above the May $11.5B projection), with product-level goals of at least $3.5B for AI fabrics and at least $1.25B for campus; full-year gross margin is maintained at 62–64%, operating margin is targeted at 48–49%, and the expected effective tax rate is ~21.5%. For Q3 the company guided revenues of ~ $3.3B, gross margin ~63%, operating margin 48–49% and diluted EPS of $1.06–$1.08 on ~1.279B diluted shares (tax rate ~21.5%). The outlook is supported by Q2 results that beat guidance (Q2 revenue just over $3.0B, +37.7% YoY vs. guide $2.8B), Q2 gross margin 63.4%, operating income $1.5B (49.9% of revenue), net income $1.3B (42.9%), diluted EPS $1.02 on 1.276B shares, cash & marketable securities ~$13.3B, operating cash flow ~ $1.1B, purchase commitments/multiyear obligations of ~$9.7B (up from ~$3.6B a year ago), inventory $2.5B (turns 1.7), deferred revenue ~$6.9B and DSOs of 68 days.Arista Networks Financial Statement Overview
Summary
Income Statement
92
Very Positive
Balance Sheet
95
Very Positive
Cash Flow
94
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 10.54B | 9.01B | 7.00B | 5.86B | 4.38B | 2.95B |
| Gross Profit | 6.64B | 5.77B | 4.49B | 3.63B | 2.68B | 1.88B |
| EBITDA | 5.11B | 4.32B | 3.33B | 2.49B | 1.64B | 981.21M |
| Net Income | 4.04B | 3.51B | 2.85B | 2.09B | 1.35B | 840.85M |
Balance Sheet | ||||||
| Total Assets | 23.72B | 19.45B | 14.04B | 9.96B | 6.78B | 5.73B |
| Cash, Cash Equivalents and Short-Term Investments | 13.34B | 10.74B | 8.30B | 5.01B | 3.02B | 3.41B |
| Total Debt | 0.00 | 0.00 | 0.00 | 0.00 | 43.96M | 56.53M |
| Total Liabilities | 8.92B | 7.08B | 4.05B | 2.74B | 1.89B | 1.76B |
| Stockholders Equity | 14.80B | 12.37B | 9.99B | 7.22B | 4.89B | 3.98B |
Cash Flow | ||||||
| Free Cash Flow | 5.16B | 4.25B | 3.68B | 2.00B | 448.17M | 951.12M |
| Operating Cash Flow | 5.31B | 4.37B | 3.71B | 2.03B | 492.81M | 1.02B |
| Investing Cash Flow | -4.63B | -3.58B | -2.46B | -687.45M | 216.33M | -925.56M |
| Financing Cash Flow | -606.40M | -1.60B | -421.81M | -83.75M | -654.60M | -360.88M |
Arista Networks Risk Analysis
Arista Networks disclosed 57 risk factors in its most recent earnings report. Arista Networks reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Arista Networks Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
86 Outperform | $227.10B | 60.93 | 30.58% | ― | 30.57% | 22.96% | |
72 Outperform | $457.17B | 38.41 | 25.14% | 1.45% | 9.21% | 25.97% | |
71 Outperform | $262.79B | 31.66 | -363.24% | 0.53% | 38.87% | 99.71% | |
70 Outperform | $63.43B | 43.93 | 6.12% | 1.17% | 23.33% | 2.87% | |
68 Neutral | $3.94B | 247.25 | 50.74% | ― | 14.90% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
ANET
Arista Networks
192.32
53.14
38.18%
CSCO
Cisco Systems
120.88
50.55
71.87%
EXTR
Extreme Networks
24.32
4.37
21.90%
HPE
Hewlett Packard Enterprise
52.43
32.04
157.19%
DELL
Dell Technologies
437.65
301.77
222.09%
Arista Networks Corporate Events
Executive/Board ChangesShareholder Meetings
Arista Networks Shareholders Back Board, Pay and Auditor
Positive
Jun 2, 2026
On May 29, 2026, Arista Networks, Inc. held its 2026 Annual Meeting of Stockholders, where shareholders elected three Class III directors—Lewis Chew, Greg Lavender and Mark B. Templeton—to serve until the 2029 annual meeting, reaffirmi...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.