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Arista Networks, Inc.
S&P 500
$205.4B
Market Cap
47.6
P/E
1.86
PEG
51.0%
ROCE
31.4%
ROE
0.00
D/E
42.8%
OPM
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🌏 Global Investor Returns
Currency-adjusted total returns for ANET including FX impact
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📈 Price History
Ratio Health
Excellent
Good
Average
Poor
By Category
Shareholding
About

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.

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📈 Growth Pattern
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⭐ Superinvestors Holding ANET
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Manager Shares Value % of Fund Period
Steve Cohen Point72 Asset Management 6.55M $803.7M 1.03% Mar 2026
Jim Simons Renaissance Technologies LLC 66.7K $8.2M 0.01% Mar 2026

SEC Form 13F data. 45-day lag from quarter end.

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3-Statement Financial Model
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Good quarter Investor Presentation One-Pager? Q1 2026
Revenue
$2.71B
+35.1% YoY
Operating Income (non-GAAP)
$1.29B
not directly comparable
Operating Margin (non-GAAP)
47.8%
0.0pp YoY
Net Income (non-GAAP)
$1.11B
+36.4% YoY (approx)
What Went Right
  • Revenue beat guidance of $2.6B, driven by AI and specialty providers
  • Record cash from operations of $1.69B, strongest in Arista's history
  • NPS improved to 89, translating to 94% customer approval
What to Watch
  • Supply chain shortages across wafers, silicon chips, CPUs, optics, and memory, with 52-week lead times
  • Gross margin pressure from higher mix of large customers and elevated costs; Q1 gross margin 62.4%
  • Deferred revenue grew to $6.2B (up $826M QoQ), driven by customer acceptance clauses and product qualification cycles
Management Guidance
  • Q2 2026 revenue approx $2.8B
  • Q2 2026 non-GAAP operating margin 46-47%
  • Full-year 2026 revenue growth raised to 27.7% (approx $11.5B), AI target raised to $3.5B, campus target $1.25B, gross margin 62-64%, operating margin ~46%
Investor Lens
The thesis is stronger after this call. Arista demonstrated robust demand across AI, cloud, and enterprise, with revenue growth accelerating to 35% and a raised full-year outlook. The company is successfully capturing Ethernet-based AI networking (scale-out/scale-across) and diversifying into NeoCloud and enterprise wins. However, persistent supply constraints – now seen as a multi-year issue – and elevated purchase commitments ($8.9B) introduce near-term execution risk and may cap upside. Management's decision to absorb cost increases to secure supply shows customer-centricity but pressures margins. Overall, the long-term AI opportunity remains intact, but investors should watch the pace of supply recovery and deferred revenue conversion.
From investor presentation · AI-generated analysis · Not investment advice
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📈 STRONG Strong Q1 beat with 35% growth, record cash flow, raised FY outlook
Revenue
Total revenue of $2.709B in Q1 2026, up 35.1% year-over-year and above the company's guidance of $2.6B. Growth was led by AI and specialty providers customers; international revenue was $418.9M (15.5% of total), down from 21.2% in Q4.
Profitability
Non-GAAP net income was $1.11B (40.9% of revenue), with diluted EPS of $0.87, up 31.8% from $0.66 in the prior year. GAAP net income was $1.023B, or $0.80 per diluted share.
Margins
Non-GAAP gross margin was 62.4%, within guidance (62-63%) and down from 63.4% in Q4 due to lower enterprise mix. Non-GAAP operating margin was 47.8%, consistent with 47.8% in the year-ago quarter. Cost drivers include elevated memory and silicon costs, partially offset by pricing adjustments and cost controls.
Balance Sheet
Cash, cash equivalents, and marketable securities ended at $12.35B. Operating cash flow was a record $1.69B, driven by strong earnings and increased deferred revenue. Inventory rose to $2.38B (turn 1.7), and purchase commitments surged to $8.9B from $6.8B in Q4 to secure long-term supply. CapEx was $54.5M, with $40M related to facility expansion in Santa Clara (estimated $180M in FY2026).
Key Risks
Management flagged industry-wide supply shortages (wafers, chips, memory, optics) with 52-week lead times, expected to persist for 1-2 years. Gross margin faces pressure from mix and higher component costs; trade-offs to pay more for supply could weigh on margins. Deferred revenue grew significantly ($6.2B) due to new products and customer acceptance clauses, creating quarterly revenue recognition volatility.
Outlook
For Q2 2026, revenue guided to ~$2.8B, with non-GAAP operating margin of 46-47% and EPS ~$0.88. Full-year 2026 revenue growth raised to 27.7% (approx $11.5B), AI target increased to $3.5B, and campus target maintained at $1.25B. Gross margin expected in 62-64% range, operating margin ~46%.
Generated by AI · Q1 2026 results · Not investment advice
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📊 Analysis Methodology

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Financial Model
Projections are built from each company's audited annual financials (Income Statement, Balance Sheet, Cash Flow) over the last 5 fiscal years. Forward assumptions — revenue growth %, EBITDA margin, D&A (USD millions), interest expense, tax rate, and capex — are AI-generated using historical context and refreshed twice a year: after the December results season and after the September/Q4 results season.

DCF Valuation
Fair Value = Σ(FCFt / (1+WACC)t) + Terminal Value. Terminal Value uses the Gordon Growth Model: FCF5 × (1+g) / (WACC−g). Default WACC: 10% (US risk-free ~4.5%, equity risk premium ~5.5%). Default terminal growth: 3% (long-run US nominal GDP proxy).

CAGR Tracker
Expected 5-year CAGR = (DCF Fair Value / Current Price)1/5 − 1. Assumes fair value is reached in exactly 5 years — a mechanical estimate only.

Data Sources & Limitations
Financial statements sourced from public filings. Prices updated daily. Forward assumptions are AI-generated. All monetary values in USD millions. Non-US ADR companies may have currency conversion inaccuracies. Models are point-in-time and do not update intra-quarter or account for M&A, macro shocks, or extraordinary items.

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Investment Risk:
Investing in securities, including US equities and ETFs, involves inherent risks including the potential loss of principal. All investments are subject to market fluctuations, economic conditions, regulatory changes, and other factors that may affect their value. Past performance is not indicative of future results. This analysis is provided for informational and educational purposes only and should not be construed as investment advice under any circumstances.

No Investment Recommendation:
This analysis does not constitute, nor should it be interpreted as, an offer, solicitation, or recommendation to buy, sell, or hold any securities or financial products. Investors are strongly advised to conduct their own independent research and due diligence and to consult with a licensed financial advisor or an SEC-registered investment adviser before making any investment decisions, taking into account their individual financial situation, risk tolerance, and investment objectives.

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Conflict of Interest Disclosure:
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Information Sources:
The analysis is based on publicly available information including SEC filings (10-K, 10-Q), annual reports, management commentary, and publicly available financial data. Information is believed to be accurate as of the date of publication but may be subject to change without notice. Readers are encouraged to independently verify all information before acting upon it.

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