Optional product analytics
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Delivery above FY2027 revenue and adjusted-earnings estimates, with operating and free cash flow at or above FY2025's $4.37 billion and $4.25 billion, could extend growth and raise value per share.
The key trigger is FY2027 company revenue below $14.12 billion, the low end of the analyst range as of 2026-09-09.
Sell. The report-date price stands above Fair value and Potential value. Reseller concentration can cut sales, while strong cash generation remains the clearest route to better results.4
The shares were assessed at a price above both public valuation points, leaving an unfavorable return profile even if near-term estimates are delivered.4
The main risk is a hypothetical revenue break from lower reseller orders, repricing, or product digestion. The FY2025 filing establishes concentration, not that these events are occurring. If they occur, sales, operating leverage, earnings, and cash could fall.7
The constructive case rests on FY2027 estimate delivery and continued strong cash generation. Together, they could extend growth and improve value per share.16
The favorable path is demand-led. Delivery of FY2027 revenue and earnings estimates would extend product growth while strong cash generation funds required investment.16
Sell because the report-date price exceeds Potential value while product and reseller concentration can shorten the growth runway.47
The favorable path is demand-led. Delivery of FY2027 revenue and earnings estimates would extend product growth while strong cash generation funds required investment.
Sell because the report-date price exceeds Potential value. If either large reseller weakens, product-led sales could slow faster than the smaller service line can offset.47
Arista’s cognitive campus portfolio was driven by customers seeking the same quality and operational efficiency available in the data center across their enterprise networks. Arista Networks, Inc. offers a robust set of solutions, ranging from modular and fixed-form-factor campus spine switches to Power-over-Ethernet ("PoE") leaf switches and Wi-Fi access points, all managed through CloudVision®. Arista Networks, Inc. offers multiple service options, allowing its customers to select the product replacement service level that best meets their needs.
Arista Networks, Inc. stocks spare parts in over 200 locations worldwide through its third-party logistics suppliers. All its service options include unlimited access to bug fixes, new-feature releases, online case management, and its community forums.
The risks reinforce each other: weaker reseller demand reduces sales, lower volume pressures profit, and persistent investment consumes more cash. The standalone shocks should not be added together.
The moat rating is None. The cited record does not establish Arista-specific switching costs, platform lock-in, distribution strength, or scale advantages. FY2025 operating income was $3.86 billion and free cash flow was $4.25 billion; these are outcomes, not structural protection.
DELL and SMCI are procurement-pricing cross-checks, while SNDK and WDC test broader hardware-budget pressure. Their economics differ, and direct network-product substitution is unproven.
FY2025 operating income was $3.86 billion and free cash flow was $4.25 billion. These levels show realized economics for FY2025, but they do not establish switching costs or other structural protection.
None of the valuation methods used to calculate Fair value relies on a separate assumption about how long the competitive advantage lasts.
The highlighted cell is Fair value when every assumption sits at its base level ($61.32). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $4.5B after modeled reinvestment of $63.8M, with terminal value at 69.6% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to , reinvestment, or resets materially.
A beat would require FY2027 companywide revenue and adjusted earnings to exceed their dated analyst means. Operating margin should remain at or above FY2025's reported level. Operating and should each remain at or above their FY2025 reported amounts.
Capital spending rose between FY2024 and FY2025. The industry benchmark also shows spending above depreciation, supporting an expansion reading.6
The demand-led favorable path requires FY2027 revenue and adjusted EPS to meet their 2026-09-09 estimates. FY2025 operating cash flow was $4.37 billion, while capex was $119.5 million, supporting capacity to cover that spending from operating cash.
The adverse path begins when product demand normalizes faster than the smaller service business can offset. Sales then slow and operating leverage weakens.
Do not establish a new position while the report-date price remains above Potential value and the operating risks remain unresolved.4
Sell existing exposure now because the report-date price exceeds Potential value. Use FY2027 revenue below $14.12 billion—the analyst-range floor as of 2026-09-09—as confirmation that the sales anchor failed. Two fiscal years below 35% operating margin or sustained capital spending above the stated threshold provide further confirmation.
The report-date price is above Fair value and Potential value.4
Reduce or exit rather than add; reseller concentration and product dependence can shorten the growth runway.7
Near-term estimates are strong, but dated support does not extend beyond FY2027.1
Sell because the report-date price stands above Fair value and Potential value, while the growth path remains exposed to product and reseller concentration.47
Strong cash generation supports the business, but it does not offset the valuation gap or prove that rapid growth will persist beyond FY2027.
Capture your own thesis, position size, and follow-up questions. Stays on this device, only you can see it.
The records this analysis drew on, as they stood when it was run.
This path is confirmed if FY2027 revenue falls below the analyst-range floor as of 2026-09-09. It is also confirmed if growth drops below the thesis floor before FY2029. The first breach lowers the modeled FY2027 sales base. The second signals slower growth, reducing incremental profit and cash without necessarily shrinking absolute revenue.
Revenue below the dated FY2027 analyst-range floor would reduce the explicit sales base and future earnings power.
Growth below the thesis floor before FY2029 would signal earlier product digestion or reseller weakness.
Operating margin below the stress floor for consecutive fiscal years would show pricing, mix, or cost pressure exceeding the expected fade.
Cash generated per dollar of reported profit below the accepted floor would undermine internally funded investment and shareholder returns.
Capital spending above the escalation threshold for consecutive years after FY2026 would keep more cash tied up without proving higher future sales.
If investors pay less than the stress assumption for each dollar of mature earnings, value per share would decline despite operating growth.
The five developments that would weaken our investment case.
A breach would be consistent with weaker product purchases or lower reseller orders, without proving either cause. FY2025 product revenue was $7.58 billion versus $1.43 billion of service revenue, so a product shortfall would have limited offset and could reduce profit and cash.
Current:The FY2027 analyst mean was $16.16 billion as of 2026-09-09.
Alert ifFY2027 revenue falls below $14.12 billion, the dated analyst-range floor.
A breach would show sales growth slowing below the modeled path, consistent with earlier product digestion or lower reseller orders without proving either cause. Slower growth would reduce incremental profit and operating leverage, lowering earnings and cash versus the expected path.
Current:The approved path expects 40.64% growth in FY2026 and 27.56% in FY2027.
Alert ifAnnual consolidated revenue growth drops below 15% in any fiscal year before FY2029.
Under this stress scenario, pricing, mix, or fixed-cost pressure would be worse than the expected fade. Less operating profit per sales dollar would lower earnings and cash.
Current:FY2025 operating income of $3.86 billion on $9.01 billion of revenue supports a 42.82% margin.
Alert ifGAAP operating margin remains below 35% for two fiscal years.
The breach would make reported profit less useful for funding investment and shareholder returns. It would remove the main cash-based support for the favorable path.
Current:FY2025 produced $1.25 of operating cash for each $1.00 of reported profit.
Alert ifOperating cash falls below $0.80 for each $1.00 of reported profit for one full fiscal year.
Under this stress scenario, the investment phase would not normalize. More cash would remain tied up, lowering free cash flow without an evidenced revenue benefit from the spending.
Current:Capital spending was 1.65 times depreciation in FY2025, with capex at $119.5 million.
Alert ifCapital spending remains at or above 2.0 times depreciation for two consecutive years after FY2026.
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Convert the revenue and margin path into after-tax free cash flow, discount the annual per-share amounts and at , then adjust for signed per current share.
Solve for the growth rate that makes the model value equal the report-date share price.
The base path holds if both dated FY2027 estimates are met and operating cash remains above reported profit. It fails if annual revenue growth breaches the thesis floor before FY2029.16
The bull path needs FY2027 companywide revenue and adjusted earnings above their dated analyst means. Operating margin at or above FY2025's level and operating and free cash flow at or above FY2025 amounts would let higher sales lift profit and cash. It fades if product demand weakens and the smaller service line cannot offset lost sales.1567
Meeting near-term estimates would preserve the thesis but would not establish the later growth duration.
That miss would lower the explicit revenue base and shorten the product cycle.
FY2025 operating cash exceeded reported profit, but stock-based compensation remains a real cost to shareholders.6
Lower orders remove sales, while repricing can reduce profit per sales dollar.7
Deterioration would reveal pricing, mix, or fixed-cost pressure.6
Strong conversion funds investment and supports value per share.6
| $2.95B |
| $4.38B |
| $5.86B |
| $7.00B |
| $9.01B |
| +32.2% |
| Gross profit | $1.88B | $2.68B | $3.63B | $4.49B | $5.77B | +32.3% |
| Operating income | $924.7M | $1.53B | $2.26B | $2.94B | $3.86B | +42.9% |
| Net income | $840.9M | $1.35B | $2.09B | $2.85B | $3.51B | +43.0% |
| EPS (diluted) | $0.66 | $1.07 | $1.65 | $2.23 | $2.75 | +43.0% |
| EBITDA | $981.2M | $1.64B | $2.49B | $3.33B | $4.32B | +44.9% |
| R&D | $586.8M | $728.4M | $854.9M | $996.7M | $1.24B | +20.5% |
| SG&A | $83.1M | $93.2M | $119.1M | $122.7M | $141.9M | +14.3% |
FY2025 free cash flow—the cash left after capital spending—was $4.25 billion after $119.5 million of capex. This level shows funding capacity, but not the return earned on recent investment.56
Capital spending rose from $32.0 million in FY2024 to $119.5 million in FY2025. FY2025 stock-based compensation was $439.2 million, so investment returns and share dilution remain relevant to value per share.
FY2025 operating profit was $3.86 billion and operating cash was $4.37 billion. Those one-year levels do not establish a dated return-on-invested-capital trend.
No same-basis comparison is made. The cited evidence establishes profit, cash, and the discount rate, not a comparable dated return series.
Operating cash exceeded net income, while free cash flow remained substantial.
The company can fund investment internally, reducing financing pressure.
FY2025 stock-based compensation was reported separately, and FY2025 diluted average shares provide the relevant per-share basis.
Aggregate profit growth may not translate fully into value per share.
| Revenue | $9,005,700,000 |
|---|---|
| Cost of revenue | $3,237,000,000 |
| Gross profit | $5,768,700,000 |
| Operating expenses | $1,912,600,000 |
| Operating income | $3,856,100,000 |
| Non-operating items and tax | -$344,700,000 |
| Net income | $3,511,400,000 |
| Total assets | $19,448,600,000 |
|---|---|
| Cash | $1,963,900,000 |
| Current assets | $16,387,000,000 |
| Total liabilities | $7,078,100,000 |
| Current liabilities | $5,376,500,000 |
| Shareholders’ equity | $12,370,500,000 |
| Net income | $3,511,400,000 |
|---|---|
| Operating inflow | $4,371,900,000 |
| Depreciation and amortization | $72,600,000 |
| Stock-based compensation | $439,200,000 |
| Other operating adjustments | $348,700,000 |
| Operating cash flow | $4,371,900,000 |
| Cash available | $7,137,400,000 |
| Beginning cash | $2,763,800,000 |
| Exchange-rate effect | $1,700,000 |
| Investing outflow | $3,576,200,000 |
| Capex | $119,500,000 |
| Other investing activities | $3,456,700,000 |
| Financing outflow | $1,595,900,000 |
| Share repurchases | $1,603,100,000 |
| Ending cash | $1,965,300,000 |
| Investing cash flow | -$3,576,200,000 |
| Financing cash flow | -$1,595,900,000 |
Source: SEC EDGAR · Filed 2026-02-17 · SEC EDGAR
| Revenue by business category | Revenue | Share | YoY |
|---|---|---|---|
| Product | $7.6B | 84.1% | 28.8% |
| Service | $1.4B | 15.9% | 27.7% |
Source: SEC EDGAR · Filed 2026-02-17 · SEC EDGAR
| Revenue by geography | Revenue | Share | YoY |
|---|---|---|---|
| Americas | $7.1B | 79.1% | 24.3% |
| EMEA | $1.1B | 11.9% | 50.1% |
| Asia Pacific | $813.3M | 9% | 45% |
Point-in-time financial data used in the 2026-09-09 analysis.
| Period | Revenue | EBITDA | Net income | Operating cash flow | Free cash flow | Capex | Depreciation and amortization | Stock-based compensation | Share repurchases | Dividends paid | Net debt issuance | Investing cash flow | Financing cash flow | Beginning cash | Ending cash | Cash and investments | Total debt | Operating margin | ROIC | WACC | ROIC − WACC spread |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016-12-31 | $1.1B | $265.1M | $184.2M | $174.3M | $152.9M | $21.4M | $19.7M | $59M | — | — | — | -$325.8M | $32.7M | — | $572.2M | $867.8M | $130.5M | 21.6% | — | 8.1% | — |
| 2017-12-31 | $1.6B | $498.2M | $423.2M | $631.6M | $616.3M | $15.3M | $20.6M | $75.4M | $0 | — | — | -$391.3M | $51.5M | $572.2M | $864.7M | $1.5B | $171.5M | 28.6% | — | 8.5% | — |
| 2018-12-31 | $2.2B | $319.2M | $328.1M | $503.1M | $479.3M | $23.8M | $27.7M | $91.2M | $0 | — | — | -$755.1M | $42.9M | $864.7M | $654.2M | $2B | $36.3M | 12.7% | — | 8.8% | — |
| 2019-12-31 | $2.4B | $838.6M | $859.9M | $963M | $947.3M | $15.8M | $32.8M | $101.3M | $266.1M | — | — | -$284.1M | -$218M | $654.2M | $1.1B | $2.7B | $83M | 33.4% | — | 7.3% | — |
| 2020-12-31 | $2.3B | $734.8M | $634.6M | $735.1M | $719.7M | $15.4M | $35.2M | $137M | $395.2M | — | — | -$608.8M | -$346.3M | $1.1B | $897.5M | $2.9B | $72.4M | 30.2% | — | 5.4% | — |
| 2021-12-31 | $2.9B | $981.2M | $840.9M | $1B | $951.1M | $64.7M | $50.3M | $186.9M | $411.6M | — | — | -$925.6M | -$360.9M | $897.5M | $625.1M | $3.4B | $56.5M | 31.4% | — | 5.8% | — |
| 2022-12-31 | $4.4B | $1.6B | $1.4B | $492.8M | $448.2M | $44.6M | $62.7M | $230.9M | $670.3M | — | — | $216.3M | -$654.6M | $625.1M | $676M | $3B | $44M | 34.9% | — | 8.6% | — |
| 2023-12-31 | $5.9B | $2.5B | $2.1B | $2B | $2B | $34.4M | $70.6M | $296.8M | $112.3M | — | — | -$687.5M | -$83.8M | $676M | $1.9B | $5B | $65.5M | 38.5% | — | 8.5% | — |
| 2024-12-31 | $7B | $3.3B | $2.9B | $3.7B | $3.7B | $32M | $62M | $355.4M | $423.6M | — | — | -$2.5B | -$421.8M | $1.9B | $2.8B | $8.3B | $59.6M | 42.0% | — | 9.3% | — |
| 2025-12-31 | $9B | $4.3B | $3.5B | $4.4B | $4.3B | $119.5M | $72.6M | $439.2M | $1.6B | — | — | -$3.6B | -$1.6B | $2.8B | $2B | $10.7B | — | 42.8% | — | — | — |
Arista Networks Inc. (ANET) trades at 36.9x forward earnings against a peer median of 11.3x. Its EV/EBITDA of 49.8x compares with a peer median of 20.4x. The comparison uses 4 peers: Sandisk Corporation, Dell Technologies Inc., Western Digital Corporation and Super Micro Computer Inc., as of 2026-09-09.
| Trend | Impact | Note |
|---|---|---|
| Companywide sales and earnings expectations | positive | The FY2027 analyst estimates as of 2026-09-09 cover companywide revenue and adjusted earnings. Meeting them would support the favorable near-term cycle, but this dated evidence does not extend beyond FY2027. |
Strong FY2025 cash generation supports self-funded investment, but reseller and product concentration make the cycle less diversified.57
| Level |
|---|
| Action |
|---|
| Why |
|---|
| Fair value or below | Reassess rather than buy automatically. | Require FY2027 estimate support, resilient margins, and continued cash generation before reconsidering. |
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Limitation: Terminal value is 69.6% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
| Dell Technologies Inc. |
| 18.7x |
| 2.3x |
| 21.0x |
| — |
| 11.5% |
| WDC | Western Digital Corporation | 15.0x | 13.3x | 34.3x | 130.9% | 43.6% |
| SMCI | Super Micro Computer Inc. | 7.6x | 0.7x | 11.5x | 21.5% | 13.4% |
