Arista NetworksLTS:0HHR -4.23%88 Gross Margin % is 61.90% as of Mar. 2026, which is 3% below its 10-year median of 63.99. GuruFocus rates LTS:0HHR with a GF Score™ of 88/100 and a GF Value™ of $139.45 (Modestly Overvalued). The stock has 4 warning signs investors should review. Among 2,453 Hardware companies, Arista Networks ranks better than 95.11% on this metric.
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Arista Networks had a gross margin of 61.90% for the quarter that ended in Mar. 2026 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Arista Networks Gross Margin % Related Terms
Arista Networks Gross Margin % Historical Data
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The historical data trend for Arista Networks's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
LTS:0HHR vs WDC, STX, DELL: Gross Margin % Comparison
For the Computer Hardware subindustry, Arista Networks's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Arista Networks Gross Margin % vs Hardware Industry
For the Hardware industry and Technology sector, Arista Networks's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Arista Networks's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Arista Networks (LTS:0HHR) has a Gross Margin % of 61.90% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Arista Networks and its competitors. This is near median its historical median of 63.99. Over the past decade, Arista Networks' Gross Margin % has ranged from 61.07 to 64.50. According to the industry distribution chart, Arista Networks ranks #120 out of 2453 companies in the Hardware industry, placing it in the top 4.9%.
Is Arista Networks' Gross Margin % too high?
Arista Networks' current Gross Margin % of 61.90% is near median its 10-year median of 63.99. Over the past 10 years, this metric has ranged from a low of 61.07 to a high of 64.50. The Hardware industry median Gross Margin % is 24.52. Arista Networks' value of 61.90% is 152.4% above this industry median. Based on the distribution chart, Arista Networks ranks #120 out of 2453 companies in the Hardware industry, which is in the top quartile — a strong position relative to peers. Overall, Arista Networks has a GF Score™ of 88/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Arista Networks' Gross Margin % compare to WDC and STX?
According to the Hardware industry distribution chart, Arista Networks ranks #120 out of 2453 companies for Gross Margin %. This places Arista Networks in the top 5% of its industry — outperforming the majority of peers. The industry median Gross Margin % is 24.52. Arista Networks' value of 61.90% is 152.4% above this benchmark. Historically, Arista Networks' own Gross Margin % has ranged from 61.07 to 64.50 over the past decade. While the company's 10-year median is 63.99 vs. the industry median of 24.52, Arista Networks has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Hardware company?
The median Gross Margin % among Hardware companies is 24.52, based on 2,453 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Arista Networks's current Gross Margin % of 61.90% is 152.4% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Arista Networks and its competitors. For the Hardware industry, the median Gross Margin % is 24.52 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Arista Networks's current Gross Margin % is 61.90%, which is near median its own 10-year median of 63.99. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Arista Networks stock overvalued right now?
Based on GuruFocus' analysis, Arista Networks (LTS:0HHR) is currently considered Modestly Overvalued. The stock's GF Value™ is $139.45, compared to a current price of $159.78 — trading 14.6% above its estimated fair value. The current Gross Margin % is 61.90%, which is near median its 10-year median of 63.99 and 152.4% above the Hardware industry median of 24.52. Arista Networks' overall GF Score™ is 88/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Arista Networks (LTS:0HHR), the current Gross Margin % is 61.90% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Arista Networks (LTS:0HHR) Overvalued in 2026?
Based on GuruFocus' analysis, Arista Networks stock appears to be overvalued.
The current stock price of $159.78 is trading 14.6% above its estimated GF Value™ of $139.45.
GuruFocus considers Arista Networks to be Modestly Overvalued.
Key valuation signals for LTS:0HHR:
Gross Margin %: 61.90% (near median its 10-year median of 63.99)
GF Value™: $139.45 vs. price of $159.78 (14.6% above fair value)
Industry Position: 152.4% above the Hardware median (#120 of 2453)
No single metric tells the full story. See the LTS:0HHR stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Arista Networks is a networking equipment provider that primarily sells Ethernet switches and software to data centers. Its marquee product is its extensible operating system that runs a single image across every single one of its devices. The firm operates as one reportable segment. It has steadily gained market share since its founding in 2004, with a focus on high-speed applications. Arista counts Microsoft and Meta Platforms as its largest customers and derives roughly three-fourths of its sales from North America.
88GF Score
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