Arista Networks (ANET)
NYSE:ANET
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Arista Networks
(NYSE:ANET)
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Rating:78Outperform
Price Target:
$162.00
▼(-1.36% Downside)
Action:Reiterated
Date:05/09/26
The score is supported primarily by ANET’s exceptional financial quality (very high margins, strong cash generation, and a near debt-free balance sheet) and a positive earnings call with raised full-year guidance and stronger AI targets. These strengths are tempered by weak near-term technical signals (below key moving averages with low RSI/Stoch) and a relatively high P/E with no dividend yield provided.
Positive Factors
High margins and profitability
Arista's sustained high gross (~63.5%), EBIT (~43%) and net (~38.3%) margins create a durable competitive moat. Exceptional operating profitability funds R&D, customer support and product development, supports strong ROE and cushions the business against pricing and cost shocks over the medium term.
Negative Factors
Persistent supply-chain constraints
Management expects multi-component shortages and ~52-week lead times for 1–2 years. Persistent supply constraints force premium sourcing, cap order flexibility, slow fulfillment and raise procurement costs, creating sustained margin pressure and execution risk across planning horizons.
Read all positive and negative factors
Positive Factors
Negative Factors
High margins and profitability
Arista's sustained high gross (~63.5%), EBIT (~43%) and net (~38.3%) margins create a durable competitive moat. Exceptional operating profitability funds R&D, customer support and product development, supports strong ROE and cushions the business against pricing and cost shocks over the medium term.
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
$195.52B
Dividend YieldN/A
Average Volume (3M)11.04M
Price to Earnings (P/E)53.9
Beta (1Y)2.04
Revenue Growth30.57%
EPS Growth22.96%
CountryUS
Employees4,412
SectorTechnology
Sector Strength88
IndustryComputer Hardware
Share Statistics
EPS (TTM)2.96
Shares Outstanding1,259,202,600
10 Day Avg. Volume10,878,698
30 Day Avg. Volume11,043,104
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 Cap0.99
Enterprise Value/Revenue19.85
Enterprise Value/Gross Profit31.24
Enterprise Value/Ebitda45.73
Forecast
1Y Price Target
$187.53Price Target Upside14.19% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
EPS Forecast (FY)3.63
Revenue Forecast (FY)$11.59B
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 networ...
How the Company Makes Money
Arista primarily makes money by selling networking hardware and associated software and services. Its largest revenue stream is product revenue from Ethernet switching and routing platforms deployed in data centers (including leaf/spine architectu...
Arista Networks Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 03, 2026
Earnings Call Sentiment Positive
The call conveyed strong commercial and financial momentum: high revenue growth (Q1 revenue +35.1% YoY), robust profitability, record operating cash flow, a raised full-year revenue target and an increased AI sales target. Product and market advances (number-one share >10GbE, >100 vendors endorsing XPO, numerous enterprise and cloud wins) support durable demand. Key concerns centered on industry-wide supply constraints (extended lead times, higher procurement costs), gross margin pressure from mix and supply premiums, deferred revenue/acceptance timing volatility, and elevated purchase commitments and inventory. Overall, the positives (growth, profitability, cash, AI traction, product leadership) outweigh the operational and supply-chain headwinds, but management expects supply-driven volatility in near-term quarters.Positive Updates
Strong Revenue Beat and Upgraded Full-Year Guidance
Q1 revenue of $2.71B, up 35.1% year-over-year and above guidance of $2.6B. Management raised FY2026 revenue growth target to 27.7% (approximately $11.5B) and provided Q2 revenue guidance of ~ $2.8B.
Negative Updates
Industry-Wide Supply Chain Constraints
Company is experiencing broad shortages (wafers, silicon, CPUs, optics, memory). Management expects supply challenges to persist 1–2 years, with extended lead times (cited ~52-week lead times) and some customer decommits—forcing the company to pay premiums to secure supply.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Revenue Beat and Upgraded Full-Year Guidance
Q1 revenue of $2.71B, up 35.1% year-over-year and above guidance of $2.6B. Management raised FY2026 revenue growth target to 27.7% (approximately $11.5B) and provided Q2 revenue guidance of ~ $2.8B.
Read all positive updates
Company Guidance
Arista guided Q2 revenue of approximately $2.8 billion with gross margin of 62–63%, operating margin of 46–47%, diluted EPS of about $0.88 on ~1.27 billion diluted shares, and an effective tax rate near 21.5%. For fiscal 2026 they raised revenue growth to 27.7% targeting roughly $11.5 billion, reiterated a FY gross margin range of 62–64% and an operating margin of ~46% (tax rate ~21.5%), raised the AI fabrics target to $3.5 billion (from $3.25B) and maintained a campus revenue goal of $1.25 billion. Management also noted Q1 as the starting base (Q1 revenue $2.71B; Q1 gross margin 62.4%; operating income $1.29B or 47.8%; net income $1.11B or 40.9%; diluted EPS $0.87 on 1.27B shares) and warned of working-capital variability amid supply constraints (cash ≈ $12.35B; cash from ops ≈ $1.69B; inventory $2.38B; inventory turns 1.7; purchase commitments $8.9B; deferred revenue $6.2B).Arista Networks Financial Statement Overview
Summary
Income Statement
92
Very Positive
Balance Sheet
97
Very Positive
Cash Flow
90
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 9.71B | 9.01B | 7.00B | 5.86B | 4.38B | 2.95B |
| Gross Profit | 6.17B | 5.77B | 4.49B | 3.63B | 2.68B | 1.88B |
| EBITDA | 4.21B | 3.93B | 3.01B | 2.33B | 1.59B | 975.07M |
| Net Income | 3.72B | 3.51B | 2.85B | 2.09B | 1.35B | 840.85M |
Balance Sheet | ||||||
| Total Assets | 21.66B | 19.45B | 14.04B | 9.96B | 6.78B | 5.73B |
| Cash, Cash Equivalents and Short-Term Investments | 12.35B | 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 | 8.17B | 7.08B | 4.05B | 2.74B | 1.89B | 1.76B |
| Stockholders Equity | 13.49B | 12.37B | 9.99B | 7.22B | 4.89B | 3.98B |
Cash Flow | ||||||
| Free Cash Flow | 5.28B | 4.25B | 3.68B | 2.00B | 448.17M | 951.12M |
| Operating Cash Flow | 5.42B | 4.37B | 3.71B | 2.03B | 492.81M | 1.02B |
| Investing Cash Flow | -3.68B | -3.58B | -2.46B | -687.45M | 216.33M | -925.56M |
| Financing Cash Flow | -802.10M | -1.60B | -421.81M | -83.75M | -654.60M | -360.88M |
Arista Networks Technical Analysis
Positive
164.23
Price Trends
148.85
Positive
141.80
Positive
140.15
Positive
Market Momentum
0.49
Negative
57.43
Neutral
81.83
Negative
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 164.23 is above the 20-day moving average (MA) of 150.45, above the 50-day MA of 148.85, and above the 200-day MA of 140.15, indicating a bullish trend. The MACD of 0.49 indicates Negative momentum. The RSI at 57.43 is Neutral, neither overbought nor oversold. The STOCH value of 81.83 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ANET.
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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $195.52B | 53.91 | 30.58% | ― | 30.57% | 22.96% | |
72 Outperform | $467.61B | 39.82 | 25.14% | 2.09% | 9.21% | 25.97% | |
69 Neutral | $50.70B | -368.24 | -0.64% | 2.17% | 15.04% | -108.60% | |
68 Neutral | $206.85B | 32.52 | -363.24% | 1.45% | 38.86% | ― | |
66 Neutral | $3.43B | 216.54 | 21.07% | ― | 14.90% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
ANET
Arista Networks
159.47
72.83
84.06%
CSCO
Cisco Systems
120.42
58.80
95.42%
EXTR
Extreme Networks
26.51
10.84
69.18%
HPE
Hewlett Packard Enterprise
43.04
26.19
155.37%
DELL
Dell Technologies
420.91
311.31
284.03%
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.