As of September 7, 2025, Arista Networks Inc has a Discounted Cash Flow (DCF) derived fair value of $189.22 per share. With the current market price at $142.85, this represents a potential upside of 32.5%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $123.93 |
| DCF Fair Value (10-year) | $189.22 |
| Potential Upside (5-year) | -13.2% |
| Potential Upside (10-year) | 32.5% |
| Discount Rate (WACC) | 6.2% - 7.6% |
Revenue is projected to grow from $7003 million in 12-2024 to $26053 million by 12-2034, representing a compound annual growth rate of approximately 14.0%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 7003 | 20% |
| 12-2025 | 8582 | 23% |
| 12-2026 | 10061 | 17% |
| 12-2027 | 11817 | 17% |
| 12-2028 | 13830 | 17% |
| 12-2029 | 16438 | 19% |
| 12-2030 | 18246 | 11% |
| 12-2031 | 20528 | 13% |
| 12-2032 | 22755 | 11% |
| 12-2033 | 24348 | 7% |
| 12-2034 | 26053 | 7% |
Net profit margin is expected to improve from 41% in 12-2024 to 48% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 2852 | 41% |
| 12-2025 | 3581 | 42% |
| 12-2026 | 4346 | 43% |
| 12-2027 | 5269 | 45% |
| 12-2028 | 6350 | 46% |
| 12-2029 | 7754 | 47% |
| 12-2030 | 8651 | 47% |
| 12-2031 | 9781 | 48% |
| 12-2032 | 10896 | 48% |
| 12-2033 | 11715 | 48% |
| 12-2034 | 12595 | 48% |
with a 5-year average of $38 million. Projected CapEx is expected to maintain at approximately 1% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 52 |
| 12-2026 | 59 |
| 12-2027 | 73 |
| 12-2028 | 94 |
| 12-2029 | 120 |
| 12-2030 | 139 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 67 |
| Days Inventory | 299 |
| Days Payables | 59 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2025 | 1913 | 287 | 42 | 454 | 1130 |
| 2026 | 4654 | 697 | 99 | 331 | 3528 |
| 2027 | 5662 | 845 | 116 | 491 | 4210 |
| 2028 | 6848 | 1018 | 136 | 716 | 4977 |
| 2029 | 8387 | 1243 | 162 | 734 | 6248 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 123.93 | -13.2% |
| 10-Year DCF (Growth) | 189.22 | 32.5% |
| 5-Year DCF (EBITDA) | 125.67 | -12.0% |
| 10-Year DCF (EBITDA) | 182.22 | 27.6% |
Is Arista Networks Inc (ANET) a buy or a sell? Arista Networks Inc is definitely a buy. Based on our DCF analysis, Arista Networks Inc (ANET) appears to be significantly undervalued with upside potential of 32.5%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $142.85.