Trefis Team
4 min read
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Arista Networks (ANET) turns more of its revenue into operating profit than any of the five networking and hardware companies in its peer group. Only Dell Technologies posted faster revenue growth. Over the past year, however, Arista shares have gained less than four of those five rivals, and its P/E sits in the middle of the group. So what do you get for Arista’s price that its rivals do not offer?
Arista Matches Ciena’s Growth At A Lower P/E
Compared with Ciena (CIEN), Arista offers the same growth and far more profit at a lower price for each dollar of earnings. Ciena, another communications equipment maker, grew revenue 32.6% over its latest four fiscal quarters. Arista posted that exact rate over its own four quarters. Arista turned 43.1% of its revenue into operating profit, against 14.1% for Ciena. Ciena’s P/E is still higher, at 78.4, compared with 57.4 for Arista.
The share prices tell a different story. Over the past year, Ciena stock rose 108.7%, while Arista stock climbed 25.8%.
Rivals that cost less than Arista either grew more slowly or retained far less of every sales dollar. Cisco Systems trades at 31.9 times earnings, but its revenue grew 11.8%. Hewlett Packard Enterprise also sits below Arista on both metrics. Dell Technologies is the one rival that grew faster, at 49.0%, and it trades at 27.5 times earnings. Dell, like Hewlett Packard Enterprise, is a technology hardware maker, a different kind of business, and it kept 9.6% of its revenue as operating profit.
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How Arista Earns Its Growth And Its Margin
Arista generates most of its money selling equipment, such as its Etherlink switches, and less from service. Its product segment brought in $7.58 billion of the company’s $9.01 billion revenue in fiscal 2025.
