Arista Networks $ANET
Is it the best positioned company in networking?
Arista ANET is a big boy already with a $35B market cap. That’s about 230x the valuation of the last company we covered here. There’s diversity for you.
I “discovered” Arista during my routine of looking at thousands of investor decks. I go through the big companies not to find investment opportunities but rather to know where the large investments are being made and the market trends.
As I went through Arista, it looked like any big networking technology company until BAM! Their business model made my eyes water. I made a note that this one was worth a closer look.
What I found is a company that is poised to not only continue to gain share but that it would enjoy a massive advantage in margins due to its architecture and business model.
The shares have performed very well but have been flat over the past year. Guidance and forward estimates look a little aggressive to me given the macro backdrop so there’s a chance we get a better (maybe a much better?) buying opportunity.
So let’s get into the business and do some valuation work on what the shares may be worth on a 2-3 year time horizon. There are links to details about the products and company so let’s focus on the crux of the matter for investors.
[As a reminder, this is not investment advice, and on top of that, this is a complex area where much more digging is advisable. If you are an expert in networking, this may be too basic for you.]
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