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Arista Networks
(NYSE:ANET)
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Rating:85Outperform
Price Target:
$184.00
▲(12.04% Upside)
Action:Reiterated
Date:06/03/26
ANET scores highly on fundamentals, driven by best-in-class margins, strong cash generation, and a very conservative (near debt-free) balance sheet. Technicals also support the score with a strong uptrend, though near-overbought signals add some short-term risk. The main offset is premium valuation (high P/E), partially balanced by upbeat guidance and AI-driven demand momentum from the latest earnings call despite supply-chain and timing volatility.
Positive Factors
High profitability
Sustained industry-leading margins give Arista durable pricing power and superior cash conversion versus peers. High gross and net margins support continued R&D and product investment, fund strategic initiatives (AI fabrics, XPO optics), and provide a structural cushion against cyclical revenue softness.
Negative Factors
Prolonged supply constraints
Multi-year component shortages force elevated purchase commitments and inventory builds, increase procurement costs, and limit shipment cadence. Structural supply tightness can cap near-term revenue capture, raise working-capital needs, and create persistent cost pressure on margins.
Read all positive and negative factors
Positive Factors
Negative Factors
High profitability
Sustained industry-leading margins give Arista durable pricing power and superior cash conversion versus peers. High gross and net margins support continued R&D and product investment, fund strategic initiatives (AI fabrics, XPO optics), and provide a structural cushion against cyclical revenue softness.
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.
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The Fly
The FlyArista Networks (ANET) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$198.45B
Dividend YieldN/A
Average Volume (3M)10.40M
Price to Earnings (P/E)53.2
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. Volume7,326,326
30 Day Avg. Volume10,395,989
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 Cap1.03
Enterprise Value/Revenue21.10
Enterprise Value/Gross Profit33.21
Enterprise Value/Ebitda44.08
Forecast
1Y Price Target
$190.31Price Target Upside15.88% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering17
EPS Forecast (FY)3.63
Revenue Forecast (FY)$11.59B
Arista Networks Business Overview & Revenue Model
Company Description
Arista Networks, Inc. is a leading global technology firm that designs, promotes, and distributes innovative cloud networking solutions across the Americas, Europe, the Middle East, Africa, and Asia-Pacific regions. Its comprehensive product portf...
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 | 4.65B | 4.32B | 3.33B | 2.49B | 1.64B | 981.21M |
| 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
Neutral
164.23
Price Trends
159.88
Negative
147.48
Positive
142.76
Positive
Market Momentum
2.23
Positive
47.49
Neutral
33.09
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ANET, the sentiment is Neutral. The current price of 164.23 is above the 20-day moving average (MA) of 163.67, above the 50-day MA of 159.88, and above the 200-day MA of 142.76, indicating a neutral trend. The MACD of 2.23 indicates Positive momentum. The RSI at 47.49 is Neutral, neither overbought nor oversold. The STOCH value of 33.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
85 Outperform | $198.45B | 53.24 | 30.58% | ― | 30.57% | 22.96% | |
72 Outperform | $448.42B | 37.67 | 25.14% | 2.09% | 9.21% | 25.97% | |
71 Outperform | $258.98B | 31.21 | -363.24% | 1.45% | 38.87% | 99.71% | |
66 Neutral | $4.15B | 260.38 | 21.07% | ― | 14.90% | ― | |
66 Neutral | $57.88B | 40.10 | 6.12% | 2.17% | 23.33% | 2.87% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
ANET
Arista Networks
157.60
55.29
54.04%
CSCO
Cisco Systems
113.77
45.95
67.76%
EXTR
Extreme Networks
31.74
13.79
76.82%
HPE
Hewlett Packard Enterprise
43.71
23.68
118.19%
DELL
Dell Technologies
399.49
278.73
230.80%
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.