Arista Networks Inc (ANET, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its strong financial performance and promising market position. With a current share price of $291.65 and a notable daily gain of 6.45%, coupled with a three-month change of 6.67%, Arista Networks Inc stands out as a robust contender in the tech sector. A detailed analysis, underscored by the GF Score, indicates that Arista Networks Inc is poised for significant growth, making it a compelling choice for investors.
What Is the GF Score?
The GF Score is a proprietary ranking system developed by GuruFocus, assessing stocks based on five key valuation aspects. These aspects 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 indicating the highest potential for outperformance. Arista Networks Inc boasts a GF Score of 93, reflecting its high 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 is a prominent provider of networking equipment, specializing in Ethernet switches and software for data centers. Its flagship product, the extensible operating system (EOS), is designed to run uniformly across all its devices. Since its inception in 2004, Arista Networks Inc has consistently captured market share, focusing on high-speed applications. With major clients like Microsoft and Meta Platforms, and approximately three-quarters of its sales generated in North America, Arista Networks Inc has established a strong market presence. The company boasts a market cap of $91.46 billion and annual sales of $5.86 billion, with an impressive operating margin of 38.52%.
Financial Strength Breakdown
Arista Networks Inc's financial robustness is evident through its Financial Strength rating and an impressive Altman Z-Score of 22.13, indicating a strong buffer against financial distress. The company's strategic management of its capital structure is further highlighted by its minimal Debt-to-Revenue ratio of 0.01.
Profitability and Growth Metrics
Arista Networks Inc's profitability is showcased by its high Profitability Rank and a consistent increase in its Operating Margin over the past five years. The company's growth trajectory is equally impressive, with a 3-Year Revenue Growth Rate of 36.3%, significantly outperforming the industry average. This is complemented by a strong increase in EBITDA, highlighting its capacity for sustained growth.
Conclusion
Considering Arista Networks Inc's formidable financial strength, impressive profitability, and consistent growth metrics, the GF Score distinctly highlights the company's superior position for potential market outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores through 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.
