Arista Networks, Inc.(ANET) - Stock detail

Arista Networks, Inc.

US
ANET
Arista Networks Inc(Listing date: 06/06/2014)

Arista Networks, Inc. was incorporated in the State of Delaware in October 2004. The company is an industry leader in networking for data-driven, client-to-cloud large-scale data center, campus, and routing environments. Its platform delivers availability, agility, automation, analytics, and security through an advanced network operating stack.

AI Value AnalystHold
Overall Rating6.7/10
Generated at:2026-04-20 17:42:49
Analysis based on real data for Arista Networks, Inc. (ANET). Financial analysis uses 5 consecutive quarterly reports ending 2025-12-31, 2025-09-30, 2025-06-30, 2025-03-31, and 2024-12-31. Valuation uses the closing price as of 2026-04-20. Data completeness is high for the analyzed periods.
Overview

Arista Networks, Inc. (ANET) is a fundamentally superb company with exceptional financial health, outstanding profitability, and a strong growth trajectory. It is a leading provider of data-driven, client-to-cloud networking solutions with a strategic position in AI and cloud networking. However, its current stock price appears overvalued based on traditional trailing earnings metrics.

Valuation
2/10
Profitability
9/10
Financial health
9/10
Operation Advice
  • Existing shareholders should Hold due to the company's quality and growth prospects.
  • New investors may want to wait for a more attractive entry point, potentially in the lower $150s, which would better align price with current fundamentals while still accounting for growth.
  • The long-term outlook remains positive.

Valuation

P/E TTM
55.58
P/E LYR
65.41
P/B MRQ
15.67
P/S TTM
--
AI Analysis
  • The stock trades at elevated valuation multiples (P/E TTM: 55.58x, Forward P/E: 65.41x, P/B: 15.67x, P/S TTM: 23.33x) reflecting its high-growth profile. A PEG ratio of approximately 2.40 indicates the stock is pricing in very high future growth expectations. The current price of $166.85 exceeds the calculated 'Growth Premium Range' and suggests the stock is overvalued relative to its current earnings.
  • The stock trades at elevated valuation multiples, reflecting its high-growth, high-quality profile.
  • P/E (TTM) is 55.58x, Forward P/E (Dynamic) is 65.41x, P/B is 15.67x, and P/S (TTM) is 23.33x.
  • These multiples are significantly above broad market averages, typical for a premium growth company in technology.
  • A simplistic PEG ratio using TTM P/E of 55.58 and net income growth of 23.12% results in a PEG of approximately 2.40.
  • A PEG above 1.0 indicates the stock is pricing in very high future growth expectations.
  • Given high growth, a reasonable P/E range of 45x-50x on FY2025 EPS suggests a value range of $123.75 - $137.50.
  • A 'Growth Premium Range' of P/E 55x-60x suggests a range of $151.25 - $165.00.
  • At $166.85, the stock price exceeds the upper bound of the 'Growth Premium Range'.
  • This suggests the price is overvalued relative to its current earnings, requiring flawless execution of future growth.
Valuation trend

Profitability

ROE TTM
31.40%
Net margin
38.99%
Gross margin
64.06%
Total revenue
9.01B
AI Analysis
  • Arista Networks demonstrates outstanding and consistent profitability with strong revenue growth accelerating from 19.50% in FY2024 to 28.60% in FY2025. Net income growth remains robust at 23.12% for FY2025. The company maintains exceptionally high and stable gross margins (~64%) and net margins (~39%), indicating strong pricing power and a competitive moat.
  • Arista Networks demonstrates outstanding and consistent profitability.
  • Revenue growth has been strong and accelerating, from 19.50% in FY2024 to 28.60% in FY2025.
  • Net income growth remains robust at 23.12% for FY2025.
  • The company maintains exceptionally high and stable gross margins (~64%) and net margins (~39%).
  • High margins indicate strong pricing power, efficient cost management, and a competitive moat.
  • Return on Equity (ROE) of 31.40% and Return on Assets (ROA) of 20.97% are outstanding.
  • High ROE and ROA show highly efficient use of shareholder equity and company assets to generate profits.
Profitability
2024Q42025Q12025Q22025Q32025Q4
ROE TTM--8.09%16.30%23.34%31.40%
Earnings
2024Q42025Q12025Q22025Q32025Q4
Total revenue7.00B2.00B4.21B6.52B9.01B

Financial health

Debt/Asset
36.39%
Current ratio
3.05
Quick ratio
2.63
Cash ratio
2.63
AI Analysis
  • The company exhibits very strong financial health with an exceptionally high current ratio of 3.05 and quick ratio of 2.63, indicating more than sufficient short-term assets to cover liabilities. The debt-to-asset ratio of 36.39% indicates a conservative capital structure with low reliance on debt financing.
  • The company exhibits a very strong financial health profile.
  • The current ratio of 3.05 and quick ratio of 2.63 are exceptionally high.
  • High liquidity ratios indicate more than sufficient short-term assets to cover liabilities.
  • This provides significant operational flexibility and a buffer against market downturns.
  • The debt-to-asset ratio of 36.39% indicates a conservative capital structure.
  • The company is not heavily reliant on debt financing, which reduces financial risk.
  • High profitability and low debt levels strongly suggest robust operating cash flow generation.
Leverage
2024Q42025Q12025Q22025Q32025Q4
Debt/Asset28.83%30.28%34.07%34.03%36.39%
Liquidity
2024Q42025Q12025Q22025Q32025Q4
Current ratio4.363.933.333.253.05