Arista Networks Inc (ANET, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its strong financial position. With its shares currently priced at $309, Arista Networks Inc has experienced a daily loss of 1.6%, yet it boasts a three-month change of 16.54%. A detailed analysis, underscored by the GF Score, indicates that Arista Networks Inc is poised for significant growth in the foreseeable future.
What Is the GF Score?
The GF Score is a proprietary stock performance ranking system developed by GuruFocus. It evaluates stocks based on five key aspects of valuation, which have shown a strong correlation with long-term stock performance from 2006 to 2021. Stocks with higher GF Scores typically yield higher returns. The GF Score ranges from 0 to 100, with 100 representing the highest potential for outperformance. Arista Networks Inc boasts a GF Score of 93, indicating a strong potential for market outperformance.
- Financial strength rank: 9/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 3/10
- Momentum rank: 6/10
Understanding Arista Networks Inc's Business
Arista Networks Inc, with a market cap of $96.83 billion and annual sales of $6.08 billion, is a leading provider of networking equipment, primarily Ethernet switches and software for data centers. Its flagship product, the extensible operating system (EOS), operates across all its devices. Founded in 2004, Arista Networks Inc has consistently gained market share, focusing on high-speed applications. Major clients include Microsoft and Meta Platforms, with approximately three-quarters of its sales derived from North America.
Financial Strength and Profitability
Arista Networks Inc's financial robustness is reflected in its impressive Altman Z-Score of 24.94, indicating a strong buffer against financial distress. The company's strategic debt management is evident from its minimal Debt-to-Revenue ratio of 0.01. Furthermore, Arista Networks Inc's profitability is highlighted by its increasing Operating Margin, which has grown from 33.43% in 2019 to 38.52% in 2023.
Growth Trajectory
Arista Networks Inc is ranked highly for growth, with a 3-Year Revenue Growth Rate of 36.3%, outperforming 94.16% of its industry peers. The company's EBITDA has also seen significant growth, with a three-year growth rate of 47 and a five-year rate of 42.1, underscoring its ability to expand profitably.
Conclusion
Considering Arista Networks Inc's strong financial strength, impressive profitability, and robust growth metrics, the GF Score highlights the company's exceptional position for potential market outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores using the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
