Arista Networks, Inc. (ANET) | Investment Case

1. Company Snapshot

1.a. 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 network applications, as well as gigabit Ethernet switching and routing platforms.

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, system integrators, value-added resellers, and original equipment manufacturer partners, as well as through its direct sales force.

The company was formerly known as Arastra, Inc.and changed its name to Arista Networks, Inc.in October 2008.

Arista Networks, Inc.was incorporated in 2004 and is headquartered in Santa Clara, California.

Show Full description

1.b. Last Insights on ANET

Arista Networks' recent performance was driven by robust revenue growth, fueled by AI networking leadership and rising demand for its Etherlink portfolio. The company's Q4 earnings report showed record revenue of $2.49 billion, up 28.9% year-over-year, and a gross margin of 63.4%. Strong cash flow growth, with operating cash flow jumping to $3.11 billion, also contributed to the performance. New product launches, including the R4 Series 800G platforms and HyperPort technology, are expected to accelerate AI performance. Despite margin pressure, the company's AI infrastructure adds muscle to growth.

1.c. Company Highlights

Last Price	133.43
Change Percentage	2.44%
Open	127.52
Previous Close	130.25
Market Cap ( Millions)	168026
Volume	5336209
Year High	164.94
Year Low	59.43
M A 50	133.59
M A 200	126.89

FCF Yield	2.53%
Dividend Yield	0.00%
ROE	31.01%
Debt / Equity	0.00%
Net Debt / EBIDTA	-47.65%
Price To Book	13.57
Price Earnings Ratio	47.8
Price To FCF	39.51
Price To sales	18.66
EV / EBITDA	40.29

2. Arista Networks' Record Revenue and Growth Trajectory

Arista Networks achieved a record revenue of $9,000,000,000 in 2025, representing 28.6% growth, with a non-GAAP gross margin of 64.6% and a non-GAAP operating margin of 48.2%. In Q4 2025, total revenues were $2,490,000,000, up 28.9% year-over-year, with a gross margin of 63.4%. The company's diluted earnings per share were $0.82, up 24.2% from the prior year, surpassing analyst estimates of $0.718, with actual EPS coming in at $0.75 is not verified but the company has performed well. Operating income was $1,200,000,000, or 47.5% of revenue, and net income was $1,050,000,000, or 42% of revenue.

Publication Date: Feb -15

                                    📋 Highlights
                                    Record 2025 Revenue::
                                                Achieved $9,000,000,000 in revenue, reflecting 28.6% growth with a non-GAAP operating margin of 48.2%.
Q4 2025 Performance::
                                                Generated $2,490,000,000 in revenue (up 28.9% YoY) and $1,200,000,000 in operating income (47.5% margin).
AI Center Expansion::
                                                AI networking revenue reached $1,500,000,000, with a 2026 target of $3,250,000,000 amid strong demand for agentic AI infrastructure.
Port Shipments Surge::
                                                Cumulative port shipments exceeded 150,000,000 in Q4 2025, driven by international growth surpassing 40% annually.

                                

Segment-wise Performance

The company's cumulative ports shipments surpassed 150,000,000 in Q4 2025, with international growth exceeding 40% annually. Arista's AI center networking revenue reached $1,500,000,000, and campus and branch expansion revenue exceeded $800,000,000, indicating a strong demand environment. The company anticipates a diversified customer base in 2026, with two customers driving 16-20% of its overall business.

Guidance and Outlook

For 2026, Arista expects 25% revenue growth, delivering approximately $11,250,000,000, with a gross margin range of 62-64%. The company raised its AI centers goal to $3,250,000,000 and reiterated its campus revenue goal of $1,250,000,000. Jayshree Ullal, Arista's CEO, expressed enthusiasm for the company's fiscal year ahead, citing a strong position in delivering customer needs in campus, WAN, data, and AI centers. Analysts estimate next year's revenue growth at 21.8%, slightly lower than the company's guidance.

Valuation Metrics

Arista's current valuation metrics indicate a 'P/E Ratio' of 50.72, 'P/S Ratio' of 19.8, and 'EV/EBITDA' of 43.02. The 'ROIC' stands at 22.64%, and 'ROE' at 31.01%, indicating efficient use of capital. These metrics suggest that the market has high expectations from the company, and any deviation from the expected growth trajectory could impact the stock price.

AI and Cloud Growth

The company's growth is driven by its strong presence in AI and cloud segments. Arista is seeing growth in its Neo Cloud momentum, driven by AI, and views this as a key area of investment. The company is also seeing an increase in deployments with AMD as the preferred accelerator, with Arista being the preferred partner due to its open standards approach.

Challenges and Mitigation

Arista is facing challenges related to memory dynamics, with the situation worsening in 2026. However, the company is planning for this and has taken a thoughtful approach to mitigate the impact. The company is guiding for 62-64% gross margin, comfortable with the range despite memory pressure. Ullal noted that the company has absorbed the costs so far but may take a one-time increase on select memory-intensive SKUs if prices continue to rise.

3. NewsRoom

DNB Asset Management AS Grows Stock Holdings in Arista Networks, Inc. $ANET

10:32

Source: defenseworld.net

Arista Networks, Inc. $ANET Shares Sold by Andra AP fonden

08:14

Source: defenseworld.net

Should You Buy Arista Networks Before Its Next Earnings Report?

Feb -26

Source: fool.com

Why Arista Networks Might Be The Better AI Play Than Ciena

Feb -26

Source: forbes.com

Arista 2.0 Strategy Picks Up Steam: Can ANET Ride This Wave?

Feb -26

Source: zacks.com

1 Underrated Artificial Intelligence (AI) Stock to Buy Before It Jumps 33%, According to Wall Street

Feb -26

Source: fool.com

Arista Networks, Inc. (ANET) Presents at Bernstein Insights: What's next in tech? - 4th Annual Tech, Media, Telecom Forum Transcript

Feb -26

Source: seekingalpha.com

14,391 Shares in Arista Networks, Inc. $ANET Purchased by Empirical Asset Management LLC

Feb -25

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (15.00%)

6. Segments

Computer Networks

Expected Growth: 15.0%

Increasing demand for high-performance data center and campus networks driven by cloud computing, AI, and IoT adoption. Arista's software-driven solutions offer scalability, security, and efficiency, positioning the company for growth in the expanding market.

7. Detailed Products

CloudEOS

Arista's CloudEOS is a network operating system that enables customers to run Arista EOS on third-party hardware or in virtual environments.

Arista 7000 Series

The Arista 7000 Series is a line of high-density, low-latency data center switches designed for cloud, HPC, and storage applications.

Arista 5000 Series

The Arista 5000 Series is a family of high-performance, modular switches for data centers and enterprise networks.

Arista 3000 Series

The Arista 3000 Series is a range of fixed-configuration switches designed for enterprise networks, data centers, and campus environments.

Arista EOS

Arista EOS (Extensible Operating System) is a network operating system that provides a single, unified platform for data center and enterprise networks.

Arista Switches

Arista offers a range of switches, including 10/40/100GbE and 400GbE options, designed to support various applications and use cases.

Arista Routing Solutions

Arista provides a range of routing solutions, including the Arista 7000R Series, designed to support large-scale data center and enterprise networks.

Arista Network Management

Arista offers a range of network management solutions, including Arista CloudVision, designed to simplify network management and monitoring.

8. Arista Networks, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Arista Networks, Inc. operates in the networking equipment industry, where substitutes such as Cisco Systems and Juniper Networks exist. However, Arista's focus on cloud and data center networking has differentiated its offerings, reducing the threat of substitutes.

Bargaining Power Of Customers

Arista's customers are primarily large enterprises and cloud providers, which can be price-sensitive. However, Arista's strong reputation and product quality reduce customer bargaining power.

Bargaining Power Of Suppliers

Arista's suppliers are primarily component manufacturers, which are numerous and competitive. This reduces the bargaining power of suppliers.

Threat Of New Entrants

The networking equipment industry has high barriers to entry, including significant R&D investments and established relationships with customers. This reduces the threat of new entrants.

Intensity Of Rivalry

The networking equipment industry is highly competitive, with established players like Cisco Systems and Juniper Networks. Arista's growth and market share gains have increased rivalry in the industry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	0.00%
Debt Cost	4.30%
Equity Weight	100.00%
Equity Cost	10.94%
WACC	10.94%
Leverage	0.00%

11. Quality Control: Arista Networks, Inc. passed 7 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

A-Score: 5.6/10

Value: 9.0

Growth: 4.1

Quality: 4.8

Yield: 8.0

Momentum: 1.5

Volatility: 6.3

1-Year Total Return ->

NetApp

A-Score: 5.5/10

Value: 3.4

Growth: 5.7

Quality: 7.4

Yield: 5.0

Momentum: 4.5

Volatility: 7.0

1-Year Total Return ->

Arista Networks

A-Score: 5.0/10

Value: 0.6

Growth: 9.4

Quality: 8.3

Yield: 0.0

Momentum: 8.0

Volatility: 3.7

1-Year Total Return ->

Dell Technologies

A-Score: 4.6/10

Value: 6.6

Growth: 4.0

Quality: 4.6

Yield: 4.0

Momentum: 5.0

Volatility: 3.7

1-Year Total Return ->

Western Digital

A-Score: 4.3/10

Value: 1.8

Growth: 3.4

Quality: 7.3

Yield: 0.0

Momentum: 10.0

Volatility: 3.3

1-Year Total Return ->

Super Micro Computer

A-Score: 3.9/10

Value: 3.6

Growth: 9.8

Quality: 5.0

Yield: 0.0

Momentum: 3.5

Volatility: 1.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

19.49%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.94%

Arista Networks, Inc. - US0404131064

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ANET

1.c. Company Highlights

Better Quality

Higher Growth

Expensive

Earnings Beats

Revenues Beats

Strong Momentum

2. Arista Networks' Record Revenue and Growth Trajectory

Segment-wise Performance

Guidance and Outlook

Valuation Metrics

AI and Cloud Growth

Challenges and Mitigation

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (15.00%)

6. Segments

Computer Networks

Expected Growth: 15.0%

7. Detailed Products

CloudEOS

Arista 7000 Series

Arista 5000 Series

Arista 3000 Series

Arista EOS

Arista Switches

Arista Routing Solutions

Arista Network Management

8. Arista Networks, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Arista Networks, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

133.43$

Current Price

133.43$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA