Arista Networks (ANET) Stock Analysis & Winston Score

Arista Networks makes the hardware and software that powers large computer networks. Its main products are network switches and routers — devices that move data quickly between servers inside data centers. Its biggest customers are large cloud companies like Microsoft and Meta, as well as financial firms and big enterprises.

Arista makes money by selling its networking hardware and then charging for software licenses and support contracts on top of that. The company operates mainly in North America but sells globally, and with a market cap around $200 billion it is one of the larger players in enterprise networking. Its main competitive edge is its software, called EOS, which is easier to manage and update than rivals like Cisco. The key growth driver is rising demand for data center capacity tied to artificial intelligence workloads, though heavy reliance on a small number of very large cloud customers remains a meaningful concentration risk.

Winston Score History

Politician Trades

43 trades / 12mo

23 Congressional buys and 20 sells on ANET in the last 12 months.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+28.9% YoY

YoY Growth Rate

Revenue accelerating

EPS Growth

+18.8% YoY

YoY Growth Rate

Steady EPS growth

R&D Spend

$1.2B/ year

↑ Rising (+24% vs prior year)

13.7% of revenue

In line with sector average (15%)

Investing heavily in future products and technology

Insider Activity

17.1%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$2.0B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Revenue accelerating

Arista Networks grew revenue 29% year-over-year and the growth rate is speeding up. That's the kind of momentum growth investors look for — the question is whether margins can follow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Share count broadly stable

−0.1% over 4y

The share count has stayed roughly flat over this period — little dilution or buyback activity.

Diluted shares outstanding: 1.28B (2021) → 1.28B (2025)

Score breakdown

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Quality

Gross Margin

62.9%

Premium pricing power — 62.9% gross margin

Operating Margin

41.5%

Excellent — 41.5% operating margin

ROCE

8.3%

Below par — 8.3% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY

+28.6%

Fast-growing sales (28.6% YoY)

EPS YoY

+22.8%

Earnings growing fast (22.8% YoY)

Healthy double-digit earnings growth — what compounders look like.

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Cash Conversion

125%

Turns 125% of profit into real cash

FCF Margin

47.2%

Converts sales into free cash efficiently (47.2%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity

N/A

Data not available

Interest Cover

100.00x

—

Comfortably covers interest (100.0x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

60.2x

Expensive — P/E 60.2

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

+24.8

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (60.2 → 35.4)

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Dividends

Not applicable for this business.

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