Arista Networks, Inc (ANET) is a leading computer hardware business based in the US. Arista Networks is listed on the NYSE and employs 2,300 staff. All prices are listed in US Dollars.
|52-week range||$156.63 - $320.34|
|50-day moving average||$292.6185|
|200-day moving average||$244.0811|
|Wall St. target price||$299.68|
|Dividend yield||N/A (0%)|
|Earnings per share (TTM)||$8.938|
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Valuing Arista Networks stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Arista Networks's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
Arista Networks's current share price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 35x. In other words, Arista Networks shares trade at around 35x recent earnings.
That's relatively high compared to, say, the trailing 12-month P/E ratio for the NASDAQ 100 at the end of 2019 (27.29). The high P/E ratio could mean that investors are optimistic about the outlook for the shares or simply that they're over-valued.
However, Arista Networks's P/E ratio is best considered in relation to those of others within the computer hardware industry or those of similar companies.
Arista Networks's "price/earnings-to-growth ratio" can be calculated by dividing its P/E ratio by its growth – to give 2.6982. A low ratio can be interpreted as meaning the shares offer better value, while a higher ratio can be interpreted as meaning the shares offer worse value.
The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into Arista Networks's future profitability. By accounting for growth, it could also help you if you're comparing the share prices of multiple high-growth companies.
However, it's sensible to consider Arista Networks's PEG ratio in relation to those of similar companies.
Arista Networks's EBITDA (earnings before interest, taxes, depreciation and amortisation) is $732.8 million.
The EBITDA is a measure of a Arista Networks's overall financial performance and is widely used to measure a its profitability.
To put Arista Networks's EBITDA into context you can compare it against that of similar companies.
|Revenue TTM||$2.2 billion|
|Operating margin TTM||31.19%|
|Gross profit TTM||$1.5 billion|
|Return on assets TTM||10.8%|
|Return on equity TTM||24.82%|
|Market capitalisation||$23.5 billion|
TTM: trailing 12 months
There are currently 2.5 million Arista Networks shares held short by investors – that's known as Arista Networks's "short interest". This figure is 15.4% down from 2.9 million last month.
There are a few different ways that this level of interest in shorting Arista Networks shares can be evaluated.
Arista Networks's "short interest ratio" (SIR) is the quantity of Arista Networks shares currently shorted divided by the average quantity of Arista Networks shares traded daily (recently around 548483.00220751). Arista Networks's SIR currently stands at 4.53. In other words for every 100,000 Arista Networks shares traded daily on the market, roughly 4530 shares are currently held short.
To gain some more context, you can compare Arista Networks's short interest ratio against those of similar companies.
However Arista Networks's short interest can also be evaluated against the total number of Arista Networks shares, or, against the total number of tradable Arista Networks shares (the shares that aren't held by "insiders" or major long-term shareholders – also known as the "float"). In this case Arista Networks's short interest could be expressed as 0.03% of the outstanding shares (for every 100,000 Arista Networks shares in existence, roughly 30 shares are currently held short) or 0.0541% of the tradable shares (for every 100,000 tradable Arista Networks shares, roughly 54 shares are currently held short).
Such a low SIR usually points to an optimistic outlook for the share price, with fewer people currently willing to bet against Arista Networks.
Find out more about how you can short Arista Networks stock.
Environmental, social and governance (known as ESG) criteria are a set of three factors used to measure the sustainability and social impact of companies like Arista Networks.
When it comes to ESG scores, lower is better, and lower scores are generally associated with lower risk for would-be investors.
Total ESG risk: 20.62
Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and Arista Networks's overall score of 20.62 (as at 01/01/2019) is excellent – landing it in it in the 16th percentile of companies rated in the same sector.
ESG scores are increasingly used to estimate the level of risk a company like Arista Networks is exposed to within the areas of "environmental" (carbon footprint, resource use etc.), "social" (health and safety, human rights etc.), and "governance" (anti-corruption, tax transparency etc.).
To gain some more context, you can compare Arista Networks's total ESG risk score against those of similar companies.
Environmental score: 2.4/100
Arista Networks's environmental score of 2.4 puts it squarely in the 4th percentile of companies rated in the same sector. This could suggest that Arista Networks is a leader in its sector terms of its environmental impact, and exposed to a lower level of risk.
Social score: 10.06/100
Arista Networks's social score of 10.06 puts it squarely in the 4th percentile of companies rated in the same sector. This could suggest that Arista Networks is a leader in its sector when it comes to taking good care of its workforce and the communities it impacts.
Governance score: 9.16/100
Arista Networks's governance score puts it squarely in the 4th percentile of companies rated in the same sector. That could suggest that Arista Networks is a leader in its sector when it comes to responsible management and strategy, and exposed to a lower level of risk.
Controversy score: 2/5
ESG scores also evaluate any incidences of controversy that a company has been involved in. A high-profile company, Arista Networks scored a 2 out of 5 for controversy – the second-highest score possible, reflecting that Arista Networks has, for the most part, managed to keep its nose clean.
Wondering how that compares? Below are the controversy scores of similar companies.
|Total ESG score||20.62|
|Total ESG percentile||15.9|
|Environmental score percentile||4|
|Social score percentile||4|
|Governance score percentile||4|
|Level of controversy||2|
We're not expecting Arista Networks to pay a dividend over the next 12 months. However, you can browse other dividend-paying shares in our guide.
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Over the last 12 months, Arista Networks's shares have ranged in value from as little as $156.63 up to $320.34. A popular way to gauge a stock's volatility is its "beta".
Beta is a measure of a share's volatility in relation to the market. The market (NYSE average) beta is 1, while Arista Networks's is 1.208. This would suggest that Arista Networks's shares are a little bit more volatile than the average for this exchange and represent, relatively-speaking, a slightly higher risk (but potentially also market-beating returns).
To put Arista Networks's beta into context you can compare it against those of similar companies.
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 network applications, as well as gigabit Ethernet switching and routing platforms, including universal leaf, spline, and universal spine products. It also provides post contract customer support services, such as technical support, hardware repair and parts replacement beyond standard warranty, bug fix, patch, and upgrade services. The company serves a range of industries comprising Internet companies, service providers, financial services organizations, government agencies, media and entertainment companies, and others. It markets and sells its products through distributors, value-added resellers, system integrators, and original equipment manufacturer partners, as well as through its direct sales force. Arista Networks, Inc. has a strategic partnership with Forescout Technologies, Inc. to reduce cybersecurity risks brought on by growth of IoT devices, network complexity, and propagation of malware. The company was formerly known as Arastra, Inc. and changed its name to Arista Networks, Inc. in October 2008. Arista Networks, Inc. was founded in 2004 and is headquartered in Santa Clara, California.
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