Arista Networks (ANET) AI Stock Analysis

• Market Cap: $147.88B
• Dividend Yield: N/A
• Average Volume (3M): 8.79M
• Price to Earnings (P/E): 44.7
• Beta (1Y): 2.31
• Revenue Growth: 27.75%
• EPS Growth: 25.42%
• Country: US
• Employees: 4,412
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): 0.75
• Shares Outstanding: 1,259,285,000
• 10 Day Avg. Volume: 9,848,308
• 30 Day Avg. Volume: 8,790,724
• PEG Ratio: 1.42
• Price to Book (P/B): 13.89
• Price to Sales (P/S): 19.83
• P/FCF Ratio: 37.77
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 20.82
• Enterprise Value/Gross Profit: 32.36
• Enterprise Value/Ebitda: 45.33
• 1Y Price Target: $170.20
• Price Target Upside: 44.94% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 19
• EPS Forecast (FY): 2.87
• Revenue Forecast (FY): $8.89B

• Rating: 83 Outperform
• Price Target: $162.00 ▲(37.95% 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

Revenue Growth

The increased revenue target reflects strong demand in AI, cloud, and enterprise sectors, indicating robust market positioning and growth potential.

Financial Stability

A debt-free balance sheet and high return on equity highlight financial stability and operational efficiency, providing a strong foundation for future growth.

Strategic Acquisitions

The acquisition of VeloCloud enhances Arista's enterprise offerings, strengthening its competitive position and expanding its market reach.

Negative Factors

Customer Loss

Losing a key AI customer could impact revenue projections and highlights potential vulnerabilities in customer concentration.

Deferred Revenue Volatility

Volatility in deferred revenue can lead to unpredictable cash flows, impacting financial planning and stability.

Leadership Changes

While potentially positive, leadership changes can introduce uncertainty and require time for strategic alignment and execution.

Arista Networks Business Overview & Revenue Model

Company Description

Arista Networks (ANET) is a leading provider of networking solutions, focusing primarily on cloud networking and data center operations. The company designs and sells multilayer network switches and software-driven cloud networking solutions for large data center storage and computing environments. Arista's core products include Ethernet switches that cater to high-performance environments, and the company is recognized for its innovative Extensible Operating System (EOS), which provides advanced network management capabilities.

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	8.45B	7.00B	5.86B	4.38B	2.95B	2.32B
Gross Profit	5.44B	4.49B	3.63B	2.68B	1.88B	1.48B
EBITDA	3.88B	3.01B	2.33B	1.59B	975.07M	734.84M
Net Income	3.36B	2.85B	2.09B	1.35B	840.85M	634.56M
Balance Sheet
Total Assets	18.05B	14.04B	9.96B	6.78B	5.73B	4.74B
Cash, Cash Equivalents and Short-Term Investments	10.11B	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	6.14B	4.05B	2.74B	1.89B	1.76B	1.42B
Stockholders Equity	11.91B	9.99B	7.22B	4.89B	3.98B	3.32B
Cash Flow
Free Cash Flow	4.05B	3.68B	2.00B	448.17M	951.12M	719.73M
Operating Cash Flow	4.14B	3.71B	2.03B	492.81M	1.02B	735.11M
Investing Cash Flow	-3.89B	-2.46B	-687.45M	216.33M	-925.56M	-608.80M
Financing Cash Flow	-1.10B	-421.81M	-83.75M	-654.60M	-360.88M	-346.34M

Arista Networks Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 117.43
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ANET, the sentiment is Negative. The current price of 117.43 is below the 20-day moving average (MA) of 139.67, below the 50-day MA of 143.90, and above the 200-day MA of 111.85, indicating a neutral trend. The MACD of -7.24 indicates Positive momentum. The RSI at 26.85 is Positive, neither overbought nor oversold. The STOCH value of 10.92 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	$147.88B	44.69	31.74%	―	27.75%	25.42%
CSCO	77 Outperform	$300.68B	28.69	23.01%	2.11%	8.91%	14.53%
PSTG	72 Outperform	$25.76B	192.49	10.04%	―	11.31%	-1.30%
JNPR	71 Outperform	―	―	―	―	-2.56%	52.05%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
DELL	60 Neutral	$82.37B	18.02	―	1.65%	10.68%	24.29%
SMCI	58 Neutral	$19.22B	25.80	12.79%	―	12.22%	-48.34%

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.