Arista Networks Valuation

ANET Stock  USD 289.98  1.57  0.54%   
At this time, the firm appears to be overvalued. Arista Networks shows a prevailing Real Value of $275.48 per share. The current price of the firm is $289.98. Our model approximates the value of Arista Networks from analyzing the firm fundamentals such as Return On Equity of 0.34, profit margin of 0.36 %, and Current Valuation of 85.76 B as well as examining its technical indicators and probability of bankruptcy. In general, most investors favor acquiring undervalued instruments and selling overvalued instruments since, at some point, asset prices and their ongoing real values will blend.
Price Book
12.4901
Enterprise Value
85.8 B
Enterprise Value Ebitda
36.84
Price Sales
15.4685
Forward PE
38.61
Overvalued
Today
289.98
Please note that Arista Networks' price fluctuation is very steady at this time. Calculation of the real value of Arista Networks is based on 3 months time horizon. Increasing Arista Networks' time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Arista Networks is useful when determining the fair value of the Arista stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Arista Networks. Since Arista Networks is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Arista Stock. However, Arista Networks' intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value.
Historical Market  289.98 Real  275.48 Target  200.56 Hype  289.98 Naive  292.96
The real value of Arista Stock, also known as its intrinsic value, is the underlying worth of Arista Networks Company, which is reflected in its stock price. It is based on Arista Networks' financial performance, assets, liabilities, growth prospects, management team, or industry conditions. The intrinsic value of Arista Networks' stock can be calculated using various methods such as discounted cash flow analysis, price-to-earnings ratio, or price-to-book ratio. That value may differ from its current market price, which is determined by supply and demand factors such as investor sentiment, market trends, news, and other external factors that may influence Arista Networks' stock price. It is important to note that the real value of any stock may change over time based on changes in the company's performance.
273.13
Downside
275.48
Real Value
318.98
Upside
Estimating the potential upside or downside of Arista Networks helps investors to forecast how Arista stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Arista Networks more accurately as focusing exclusively on Arista Networks' fundamentals will not take into account other important factors:
Earnings
Estimates (0)
LowProjectedHigh
1.661.741.97
Details
Hype
Prediction
LowEstimatedHigh
287.63289.98292.33
Details
Naive
Forecast
LowNext ValueHigh
290.60292.96295.31
Details
29 Analysts
Consensus
LowTarget PriceHigh
182.51200.56222.62
Details

Arista Networks Investments

(653.08 Million)

Arista Networks Valuation Ratios as Compared to Competition

Comparative valuation techniques use various fundamental indicators to help in determining Arista Networks's current stock value. Our valuation model uses many indicators to compare Arista Networks value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Arista Networks competition to find correlations between indicators driving Arista Networks's intrinsic value. More Info.
Arista Networks is number one stock in price to sales category among related companies. It is number one stock in net asset category among related companies making up about  643,036,235  of Net Asset per Price To Sales. . Comparative valuation analysis is a catch-all model that can be used if you cannot value Arista Networks by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Arista Networks' Stock . Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Arista Networks' earnings, one of the primary drivers of an investment's value.
Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates Arista Networks' worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors' valuation analysis is an important metric that will give you a perspective on different companies. It helps you know the worth of the potential investment in Arista Networks and how it compares across the competition.

About Arista Networks Valuation

The stock valuation mechanism determines the current worth of Arista Networks on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of Arista Networks. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Arista Networks based exclusively on its fundamental and basic technical indicators. By analyzing Arista Networks's financials, quarterly and monthly indicators, and its related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Arista Networks's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Arista Networks. We calculate exposure to Arista Networks's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Arista Networks's related companies.
Last ReportedProjected for 2024
Gross Profit3.6 B3.8 B
Pretax Profit Margin 0.41  0.21 
Operating Profit Margin 0.39  0.21 
Net Profit Margin 0.36  0.37 
Gross Profit Margin 0.62  0.72 

Arista Networks Quarterly Retained Earnings

5.11 Billion

8 Steps to conduct Arista Networks' Valuation Analysis

Company's valuation is the process of determining the worth of any company in monetary terms. It estimates Arista Networks' potential worth based on factors such as financial performance, market conditions, growth prospects, and overall economic environment. The result of company valuation is a single number representing a Company's current market value. This value can be used as a benchmark for various financial transactions such as mergers and acquisitions, initial public offerings (IPOs), or private equity investments. To conduct Arista Networks' valuation analysis, follow these 8 steps:
  • Gather financial information: Obtain Arista Networks' financial statements, including balance sheets, income statements, and cash flow statements.
  • Determine Arista Networks' revenue streams: Identify Arista Networks' primary sources of revenue, including products or services offered, target markets, and pricing strategies.
  • Analyze market data: Research Arista Networks' industry and market trends, including the size of the market, growth rate, and competition.
  • Establish Arista Networks' growth potential: Evaluate Arista Networks' management, business model, and growth potential.
  • Determine Arista Networks' financial performance: Analyze its financial statements to assess its historical performance and future potential.
  • Choose a valuation method: Consider the Company's specific circumstances and choose an appropriate valuation method, such as the discounted cash flow (DCF) or comparable analysis method.
  • Calculate the value: Apply the chosen valuation method to the financial information and market data to calculate Arista Networks' estimated value.
  • Review and adjust: Review the results and make necessary adjustments, considering any relevant factors that may have been missed or overlooked.
Note: This is a general outline, and different approaches and methods may be used depending on the type and size of the company being valued. We also recomment to seek professional assistance to ensure accuracy.

Arista Networks Growth Indicators

Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines. Note, investing in growth stocks can be very risky. If the company such as Arista Networks does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
Common Stock Shares Outstanding317.1 M
Quarterly Earnings Growth Y O Y0.418
Forward Price Earnings38.61

Arista Networks Current Valuation Indicators

Valuation refers to the process of determining the present value of Arista Networks and all of its assets. It can be calculated using a number of techniques. As many analysts who try to value Arista we look at many different elements of the entity such as Arista's management, its prospective future earnings, the current market value of the company's assets, as well as its capital structure formation. Arista Networks' valuation analysis is also a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final Arista Networks' valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
Valuations are an essential part of business, for companies themselves, but also for investors. For companies, such as Arista Networks, valuations can help measure their progress and success and can help them track their performance in the market compared to others. In addition, investors can use Arista Networks' valuations to help determine the worth of potential investments. They can do this by using data and information made public by a company. Regardless of who the valuation is for, it essentially describes Arista Networks' worth.
When determining whether Arista Networks is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if Arista Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Arista Networks Stock. Highlighted below are key reports to facilitate an investment decision about Arista Networks Stock:
Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in Arista Networks. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in income.
For more information on how to buy Arista Stock please use our How to Invest in Arista Networks guide.
Note that the Arista Networks information on this page should be used as a complementary analysis to other Arista Networks' statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

Complementary Tools for Arista Stock analysis

When running Arista Networks' price analysis, check to measure Arista Networks' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Arista Networks is operating at the current time. Most of Arista Networks' value examination focuses on studying past and present price action to predict the probability of Arista Networks' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Arista Networks' price. Additionally, you may evaluate how the addition of Arista Networks to your portfolios can decrease your overall portfolio volatility.
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Is Arista Networks' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Arista Networks. If investors know Arista will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Arista Networks listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
0.418
Earnings Share
6.58
Revenue Per Share
18.943
Quarterly Revenue Growth
0.208
Return On Assets
0.1691
The market value of Arista Networks is measured differently than its book value, which is the value of Arista that is recorded on the company's balance sheet. Investors also form their own opinion of Arista Networks' value that differs from its market value or its book value, called intrinsic value, which is Arista Networks' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Arista Networks' market value can be influenced by many factors that don't directly affect Arista Networks' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Arista Networks' value and its price as these two are different measures arrived at by different means. Investors typically determine if Arista Networks is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Arista Networks' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.