# Arista Networks (ANET.US)

Canonical: https://gigainvestors.com/s/ANET

Analysis as of: 2026-10-16T07:26:31.132Z. Financial observations: FY2011–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $185.58 per share; close as of 2026-10-15.

Estimated value: low $52.33 per share, central $72.50 per share, high $83.75 per share. Buy at or below the central value $72.50 per share. Valuation as of 2026-10-16T07:26:31.132Z; scenarios are not confidence intervals.

Expected annual return: 5.6% at the stated quote. About 5.6% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.26×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.29×

- FY2018: 0.13×

- FY2019: 0.33×

- FY2020: 0.30×

- FY2021: 0.31×

- FY2022: 0.35×

- FY2023: 0.39×

- FY2024: 0.42×

- FY2025: 0.43×

- LTM to Jun 2026: 0.43×

### moat: pass

- ROIC, median of available years: >100%

- ROIC, second-lowest year: 79.6%

- Typical minus recent gross margin: -0.1 pp

- Typical gross margin (annual median): 64.0%

- Recent gross margin (lower of latest and 3-year median): 64.1%

- Years with nonpositive capital: 0

- Capital spending / revenue: 1.0%

- ROIC including acquisitions, ten-year median: >100%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 50.0%

- FY2017: >100%

- FY2018: >100%

- FY2019: >100%

- FY2020: >100%

- FY2021: >100%

- FY2022: 79.6%

- FY2023: 96.9%

- FY2024: >100%

- FY2025: >100%

### economics: pass

- Owner earnings / net income, 5-yr: 1.01×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $11B

- Net income, five-year total: $11B

- Return on incremental invested capital: 95.0%

- Working capital / revenue, annual change: 1.4 pp

- Working capital / revenue, change between three-year averages: 9.6 pp

- Working capital / revenue, final three-year average: 39.7%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 1.01×

- FY2023: 1.02×

- FY2024: 1.01×

- FY2025: 1.00×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 140.7% vs 173.5%

- Per-share earnings: 0.15 to 2.23 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 1.0%

- Ordinary dilution, 5-year annual growth: 0.1%

- Market cap gain: $157B

- Cumulative retained earnings: $9.0B

- Diluted shares, 10-year annual growth: 1.0%

- Diluted shares, 5-year annual growth: 0.1%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 39.6%

- Per-share value change: $2.07

- Per-share value, starting three-year median: $0.15

- Per-share value, ending three-year median: $2.23

- Buybacks concentrated in cheaper years (correlation): 0.57

- Average buyback yield: 0.8%

- Buyback history: 9 years

- Debt-funded buybacks: No

- Acquisition spending: $516M

- Cumulative net income, 10 years: $13B

- ROIC, first three-year median: >100%

- ROIC, last three-year median: >100%

Chart: Earnings per share; fiscal year observations.

- FY2016: $0.15

- FY2017: $0.33

- FY2018: $0.25

- FY2019: $0.66

- FY2020: $0.50

- FY2021: $0.66

- FY2022: $1.07

- FY2023: $1.65

- FY2024: $2.23

- FY2025: $2.75

### accounting: pass

- Sloan accruals: -4.4%

- Receivables to sales index (DSRI): 1.29×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 10.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.25×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.03×

Chart: Sloan accruals; fiscal year observations.

- FY2016: 3.1%

- FY2017: -8.5%

- FY2018: -5.7%

- FY2019: -2.5%

- FY2020: -2.1%

- FY2021: -3.1%

- FY2022: 12.7%

- FY2023: 0.5%

- FY2024: -6.1%

- FY2025: -4.4%

## Holders

- [Francois Rochon](https://gigainvestors.com/GC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Lee Ainslie](https://gigainvestors.com/mc): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 20.4% a year for ten years · "ANET is benefiting from the rapid expansion of AI data-center infrastructure." (finance.yahoo.com, Aug 2026) · sales +17%

Story as of 2026-10-16T09:58:18.541Z; price observation 2026-10-15.

Price needs cash profits to grow 20.4% a year for ten years

- 2025-06-23: Arista rises as Evercore expects sustained 20%-plus revenue growth ([seekingalpha.com](https://seekingalpha.com/news/4460923-arista-rises-as-evercore-expects-sustained-20-percent-plus-revenue-growth?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2025-07-07: Arista Networks' SWOT analysis: AI boom propels stock amid market challenges ([investing.com](https://www.investing.com/news/swot-analysis/arista-networks-swot-analysis-ai-boom-propels-stock-amid-market-challenges-93CH-4124166))

- 2025-08-06: Arista Earnings Pop On AI, Cloud Momentum. 2025 Guidance Hiked. ([finance.yahoo.com](https://finance.yahoo.com/m/c2b20f6a-7d29-308a-8ac0-331dd3b0295c/arista-earnings-pop-on-ai%2C.html))

- 2025-11-05: Arista stock falls on weak outlook, Trex plunges on earnings ([finance.yahoo.com](https://finance.yahoo.com/video/arista-stock-falls-weak-outlook-191054940.html))

- 2026-04-24: Arista Networks Raises AI Target As Ethernet Challenges InfiniBand In Cloud ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/arista-networks-raises-ai-target-220451447.html))

- 2026-08-05: ANET Q2 Earnings Call Centers on Supply Gains and 2026 Raise ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/anet-q2-earnings-call-centers-140000921.html))

### Sales · FY2025–2026

sales +17%; source https://www.sec.gov/Archives/edgar/data/1596532/000159653226000013/anet-20251231.htm; observed 2026-02-17.

- FY2017: $1.6B 

- FY2018: $2.2B 

- FY2019: $2.4B 

- FY2020: $2.3B 

- FY2021: $2.9B 

- FY2022: $4.4B 

- FY2023: $5.9B 

- FY2024: $7.0B 

- FY2025: $9.0B 

- FY2026: $11B 

### Gross margin · FY2025

gross margin 64.1%; source https://www.sec.gov/Archives/edgar/data/1596532/000159653226000013/anet-20251231.htm; observed 2026-02-17.

- FY2016: 64.0% 

- FY2017: 64.5% 

- FY2018: 63.8% 

- FY2019: 64.1% 

- FY2020: 63.9% 

- FY2021: 63.8% 

- FY2022: 61.1% 

- FY2023: 61.9% 

- FY2024: 64.1% 

- FY2025: 64.1% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in computer hardware; annual sales are USD 9 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1596532/000159653226000013/anet-20251231.htm (filed 2026-02-17); FY2025: revenue 9005700000; grossProfit 5768700000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); ANET.US: Arista Networks, Inc. engages in the development, marketing, and sale of data-driven, client to cloud networking solutions for AI, data center, campus, and routing environments in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. Its cloud networking solutions consist of Extensible Operating System (EOS), a publish-subscribe state-sharing networking operating system offered in combination with a set of network applications. The company offers data center, cloud and AI networking, cognitive adjacencies, and cognitive network software and services. It also provides post contract customer support services, such as technical support, hardware repair and replacement parts beyond standard warranty, bug fixes, patches, and upgrade services. The company serves a range of industries comprising internet companies, cloud service providers, financial services organizations, government agencies, media and entertainment, healthcare, oil and gas, education, manufacturing, industrial, 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. Arista Networks, Inc. was formerly known as Arastra, Inc. and changed its name to Arista Networks, Inc. in October 2008. The company was incorporated in 2004 and is headquartered in Santa Clara, California.

### Why customers stay

Margins ranged from 61.9% to 64.1% during 2023–25; it earns over 100% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2023: grossProfit / revenue = 61.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2024: grossProfit / revenue = 64.1%.

- Source: https://www.sec.gov/Archives/edgar/data/1596532/000159653226000013/anet-20251231.htm (filed 2026-02-17); FY2025: grossProfit / revenue = 64.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); 10-year return on capital observations [[2016,0.4995245175861109],[2017,1.4073786503177834],[2018,1.6095520173351863],[2019,4.048308158067176],[2020,1.8202521994580405],[2021,1.9052901870781431],[2022,0.7960959287099659],[2023,0.9687726662289585],[2024,1.7350378319545676],[2025,2.630163523784404]]; median 1.672294924644877. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Spends 1.3% of cash earnings on expansion; earns 95% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2016: growth capex 1670000; upkeep 19749000; owner earnings 184189000. Growth capex / owner earnings = 0.009066773802995835.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2017: growth capex 0; upkeep 15279000; owner earnings 428562000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2018: growth capex 0; upkeep 23830000; owner earnings 331956000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2019: growth capex 0; upkeep 15751000; owner earnings 876965000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2020: growth capex 0; upkeep 15384000; owner earnings 654331000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2021: growth capex 14402000; upkeep 50334000; owner earnings 840854000. Growth capex / owner earnings = 0.017127824806684632.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2022: growth capex 0; upkeep 44644000; owner earnings 1370502000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2023: growth capex 0; upkeep 34434000; owner earnings 2123517000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2024: growth capex 0; upkeep 32032000; owner earnings 2882106000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1596532/000159653226000013/anet-20251231.htm (filed 2026-02-17); FY2025: growth capex 46900000; upkeep 72600000; owner earnings 3511400000. Growth capex / owner earnings = 0.013356495984507603.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); Incremental return on capital 0.9502959037149681, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); Dividend observations: [[2016,0],[2017,0],[2018,0],[2019,0],[2020,0],[2021,0],[2022,0],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1596532/000159653226000013/anet-20251231.htm (filed 2026-02-17); FY2025: cash repurchases 1603100000 USD.

### Are managers owners

Insiders own 17.2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); ANET.US SharesStats.PercentInsiders = 17.246 percentage points; cache date 2026-10-16.

### What could break it

"Some of the key components in our products come from sole or limited sour" (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1596532/000159653226000013/anet-20251231.htm (filed 2026-02-17); Some of the key components in our products come from sole or limited sour

### What the price says

The price assumes cash profits grow 20.4% yearly over ten years; actual growth was 38.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); Ten-year compound average after fade. Initial solved rate 0.3888124377585155. Price 185.58; FX 1; discount 0.1; same compounder ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.10503281896144986 → FY2025 2.7525280238300542. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-11: $5.93 per share

- 2016-12: $6.05 per share

- 2017-01: $5.88 per share

- 2017-02: $7.44 per share

- 2017-03: $8.27 per share

- 2017-04: $8.73 per share

- 2017-05: $9.21 per share

- 2017-06: $9.36 per share

- 2017-07: $9.33 per share

- 2017-08: $11.01 per share

- 2017-09: $11.85 per share

- 2017-10: $12.49 per share

- 2017-11: $14.57 per share

- 2017-12: $14.72 per share

- 2018-01: $17.24 per share

- 2018-02: $16.86 per share

- 2018-03: $15.96 per share

- 2018-04: $16.53 per share

- 2018-05: $15.72 per share

- 2018-06: $16.09 per share

- 2018-07: $15.98 per share

- 2018-08: $18.69 per share

- 2018-09: $16.62 per share

- 2018-10: $14.40 per share

- 2018-11: $14.90 per share

- 2018-12: $13.17 per share

- 2019-01: $13.42 per share

- 2019-02: $17.83 per share

- 2019-03: $19.65 per share

- 2019-04: $19.52 per share

- 2019-05: $15.29 per share

- 2019-06: $16.23 per share

- 2019-07: $17.09 per share

- 2019-08: $14.16 per share

- 2019-09: $14.93 per share

- 2019-10: $15.29 per share

- 2019-11: $12.20 per share

- 2019-12: $12.71 per share

- 2020-01: $13.96 per share

- 2020-02: $12.07 per share

- 2020-03: $12.66 per share

- 2020-04: $13.71 per share

- 2020-05: $14.59 per share

- 2020-06: $13.13 per share

- 2020-07: $16.24 per share

- 2020-08: $13.97 per share

- 2020-09: $12.93 per share

- 2020-10: $13.06 per share

- 2020-11: $16.92 per share

- 2020-12: $18.16 per share

- 2021-01: $19.22 per share

- 2021-02: $17.49 per share

- 2021-03: $18.87 per share

- 2021-04: $19.70 per share

- 2021-05: $21.21 per share

- 2021-06: $22.64 per share

- 2021-07: $23.77 per share

- 2021-08: $23.10 per share

- 2021-09: $21.48 per share

- 2021-10: $25.61 per share

- 2021-11: $31.01 per share

- 2021-12: $35.94 per share

- 2022-01: $31.08 per share

- 2022-02: $30.68 per share

- 2022-03: $34.74 per share

- 2022-04: $28.89 per share

- 2022-05: $25.57 per share

- 2022-06: $23.43 per share

- 2022-07: $29.16 per share

- 2022-08: $29.97 per share

- 2022-09: $28.22 per share

- 2022-10: $30.22 per share

- 2022-11: $34.83 per share

- 2022-12: $30.34 per share

- 2023-01: $31.50 per share

- 2023-02: $34.67 per share

- 2023-03: $41.97 per share

- 2023-04: $40.04 per share

- 2023-05: $41.58 per share

- 2023-06: $40.51 per share

- 2023-07: $38.77 per share

- 2023-08: $48.81 per share

- 2023-09: $45.98 per share

- 2023-10: $50.09 per share

- 2023-11: $54.93 per share

- 2023-12: $58.88 per share

- 2024-01: $64.67 per share

- 2024-02: $69.39 per share

- 2024-03: $72.50 per share

- 2024-04: $64.14 per share

- 2024-05: $74.41 per share

- 2024-06: $87.62 per share

- 2024-07: $86.64 per share

- 2024-08: $88.35 per share

- 2024-09: $95.96 per share

- 2024-10: $96.61 per share

- 2024-11: $101.46 per share

- 2024-12: $110.53 per share

- 2025-01: $115.23 per share

- 2025-02: $93.05 per share

- 2025-03: $77.48 per share

- 2025-04: $82.27 per share

- 2025-05: $86.64 per share

- 2025-06: $102.31 per share

- 2025-07: $123.22 per share

- 2025-08: $136.55 per share

- 2025-09: $145.71 per share

- 2025-10: $157.69 per share

- 2025-11: $130.68 per share

- 2025-12: $131.03 per share

- 2026-01: $141.74 per share

- 2026-02: $133.50 per share

- 2026-03: $122.78 per share

- 2026-04: $172.71 per share

- 2026-05: $159.47 per share

- 2026-06: $169.88 per share

- 2026-07: $180.35 per share

- 2026-08: $195.69 per share

- 2026-09: $203.59 per share

- 2026-10: $204.52 per share

## Annual estimated value (USD per share)

- FY2016: low $2.21 per share, central $2.42 per share, high $2.69 per share

- FY2017: low $3.25 per share, central $3.54 per share, high $3.92 per share

- FY2018: low $4.28 per share, central $4.67 per share, high $5.18 per share

- FY2019: low $5.39 per share, central $5.85 per share, high $6.46 per share

- FY2020: low $7.41 per share, central $8.12 per share, high $9.08 per share

- FY2021: low $11.48 per share, central $15.28 per share, high $17.49 per share

- FY2022: low $15.74 per share, central $21.49 per share, high $24.84 per share

- FY2023: low $23.50 per share, central $31.92 per share, high $36.82 per share

- FY2024: low $29.62 per share, central $39.58 per share, high $45.38 per share

- FY2025: low $45.43 per share, central $62.47 per share, high $71.97 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:32:07.302Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1596532/000159653226000013/anet-20251231.htm); period 2025-12-31, filed 2026-02-17.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.