Arista Networks, Inc.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Arista Networks is executing at an elite level, with Q2 2026 revenue of $3.04B accelerating to 37.7% YoY growth — up from 28.6% for full-year FY2025 — alongside a 42.8% operating margin, $4.25B in zero-debt free cash flow, and eight consecutive EPS beats.
However, at $216.74 the stock trades at 67.5x P/E and 25.9x P/S, a 101% and 736% premium to the peer median respectively, pricing in continued hyper-growth with no room for error. Persistent insider selling — $2.28B net over 24 months with zero acquisitions — and a smart money score that has deteriorated from 0.18 in Q4 2024 to -0.01 as of Q2 2026 temper conviction on an otherwise exceptional fundamental picture.
What could go wrong
- Valuation compression. At 67.5x P/E — double the peer median of 33.5x — any deceleration in growth or guidance could trigger a sharp multiple contraction despite strong absolute performance.
- Insider selling persistence. 894 insider transactions over 24 months with zero acquisitions and net dispositions of 14.5M shares worth $2.28B, including CEO selling as recently as October 6, 2026, signals that those closest to the business are consistently taking chips off the table.
- Smart money outflow. Smart money score has declined from 0.18 in Q4 2024 to -0.01 as of Q2 2026, indicating institutional positioning has turned slightly net negative.
- Customer concentration. Recent Zacks commentary flags customer concentration and margin pressure as factors clouding the upside despite AI networking tailwinds.
What would change my mind
Where this comes from: Q2 2026 results · FY25 fundamentals · peer comparison, 9 Oct · insider trades, 24 months to 6 Oct. Orin's read on ANET; not advice.
How has the share price moved?
Up 19.3% over twelve months, from $156.81 on 27 Oct 2025 to $187.00 at the Tue 27 Oct 2026 close. Its highest close in that time was $216.74 on 9 Oct 2026; the last close is 13.7% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 35.6M, on 6 May 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
- Rose flags: large share sales by the company's own officers and directors, from the Form 4 each one files after trading.
On file
All ANET filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $15.5B | 0.2% |
| Vanguard Capital Management | $11.7B | 0.2% |
| State Street | $8.2B | 0.2% |
| FMR | $8.0B | 0.3% |
| Geode Capital Management | $4.7B | 0.2% |
| Vanguard Portfolio Management | $4.4B | 0.2% |
| T. Rowe Price Associates | $3.9B | 0.4% |
| Morgan Stanley | $3.3B | 0.2% |
| Capital Research Global Investors | $2.2B | 0.3% |
| Ameriprise Financial | $2.2B | 0.4% |
143 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 920 Form 4 filings; open-market trades net −$2.3B. Of the 50 on hand, 0 were open-market purchases and 46 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about ANET
Orin answers questions about ANET from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 58.3× its last 12 months of profit (Tue 27 Oct close) — higher than in all 5 of its last 5 fiscal years (middle 47.0×); the typical Technology company on the NYSE is at 39.5×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 58.3×above usual | 47.0× | 39.5× |
| P/S | 22.4×above usual | 14.9× | — |
| EV/EBITDA | 45.9×above usual | 37.7× | — |
| P/B | 15.9×above usual | 11.1× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $227 (from $164 to $289) — 21% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$227
$164 – $289 · +21% against the last close
- 18 buy or overweight
- 0 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 58.3× its last 12 months of profit; the middle P/E of the 5 companies it is compared to that made a profit is 30.2×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| ANETArista Networks, Inc. | $236B | 58.3× | 45.9× | 63.0% | 38.4% | 31% |
| CSCOCisco Systems, Inc. | $439B | 33.1× | 23.1× | 64.5% | 21.0% | 27% |
| DELLDell Technologies Inc. | $319B | 28.7× | 18.6× | 19.8% | 7.5% | n/m |
| HPEHewlett Packard Enterprise Company | $81B | 30.2× | 15.1× | 36.0% | 6.6% | 11% |
| IBMInternational Business Machines Corporation | $237B | 21.0× | 16.6× | 58.0% | 16.0% | 33% |
| NTAPNetApp, Inc. | $45B | 31.7× | 21.3× | 70.6% | 19.2% | 114% |
- DELL: return on equity is not meaningful (n/m) — book value is below zero.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 58.3× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now58.3×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Technology companies on the NYSE were priced at a typical 39.5× their yearly profit (Tue 27 Oct close).
- Now39.5×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $90 a share — 52% below the $187.93 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $90 | 52% below $187.93 |
| Levered | $71 | 62% below $187.93 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.