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Arista Networks, Inc. (ANET) stock analysis

Arista Networks bounces 5.51% ahead of Nov 3 earnings, after a sharp pullback from its 52-week high

Arista closed at 187.00 on Oct 27, 2026, up 5.51% on the day but 13.99% below its 52-week high of 217.41 set 12 days earlier. Revenue growth of 32.57% year over year and a 43.14% operating margin sit against a forward P/E of 35.55, roughly double the industry median. Earnings are due Nov 3 after the close, and options imply a move of 9.28%.

  • Price: 187.00
  • Market Cap (USD): $235.41B
  • P/E: 58.20×
  • Fwd P/E: 35.55×
  • Div Yield: 0.00%
  • 1Y Return: 21.57%
  • Next Earnings: Nov 3, 2026
  • Mean Target: 247.80
  • Rating: Strong Buy

Bull case

  • Revenue grew 32.57% year over year, with the latest quarter up 37.69% and 25 consecutive quarters of revenue increases; three quarters of acceleration are recorded.
  • Operating margin is 43.14% (93rd percentile of US Technology) and ROIC is 246.98% (98th percentile), with no debt and net cash of 13.34B.
  • The company has beaten EPS estimates 43 times in a row, with a 15.12% surprise on Aug 4, 2026; 18 analysts have a mean target of 247.80, 32.51% above the price.

Bear case

  • Forward P/E of 35.55 (based on next year's consensus EPS) is 104.06% above the industry median of 17.42 and in the 81st percentile of US Technology; price to sales is 22.33.
  • Insiders sold repeatedly: 207 sales and no buys over 90 days, a net value of -723.7M, including CEO Jayshree Ullal's 55.0M sale on Oct 6, 2026.
  • The stock is highly volatile, with a 1-year beta of 2.2, a 1-year max drawdown of -28.33% and a 14.84% post-earnings drop on May 5, 2026 despite an EPS beat.

What to watch

  • Q3 earnings on Nov 3, 2026 after the close; consensus EPS is 1.08 and the implied move is 9.28%.
  • The 20-day average at 195.54 and 50-day average at 195.69, which price is currently below, and the 10-day average at 181.41.
  • The 200-day average at 164.36 and the 20-day low of 168.25 as nearby support levels.
  • The 52-week and all-time high of 217.41 as the upper reference.

General

Arista designs cloud networking products, including Ethernet switching and routing hardware, operating software and support services. Growth and profitability are strong, but the valuation is high relative to peers. The stock has fallen back from its recent peak into earnings.

Business and momentum

Revenue over the last twelve months was $10.54B, with net income of 4.04B and a net margin of 38.37%. Product sales were 84.13% of fiscal 2025 revenue and services 15.87%. The Americas generated 79.08% of revenue. Quarterly revenue reached 3.04B in Q2 FY2026.

Valuation in context

Trailing P/E is 58.20 and forward P/E is 35.55, versus a sector median of 21.60. The PEG ratio is 1.27 and free cash flow yield is 2.19%. Consensus EPS growth for next year is 27.90%, above the sector median of 19.76%, which partly explains the premium.

Analysts and market signals

As of Oct 28, 2026 the consensus is Buy, with 41 buy and 12 hold ratings and no sells. Bernstein initiated at Outperform with a 250 target on Sep 30, 2026. Short interest is low at 0.97% of float as of Oct 15, 2026.

Long-term investor

Arista combines multi-year growth, very high returns on capital and a debt-free balance sheet. The debate is whether growth can justify a forward P/E of 35.55 over 3-5 years. Insider selling and a modest buyback pace are counterpoints.

Growth and margins

Revenue grew from 2.32B in fiscal 2020 to 9.01B in fiscal 2025, with a 5-year CAGR of 31.19%. Diluted EPS rose from 0.50 to 2.75. Gross margin is 63.00%, down 1.23% over the year, while operating margin held at 43.14%. ROE is 31.48% and ROIC is 246.98%.

Balance sheet and cash return

Total debt is zero against 13.34B in cash and equivalents, and the current ratio is 2.96. Free cash flow was 5.16B over the last twelve months, a 48.91% margin. Repurchases were 1.60B in fiscal 2025 versus 423.6M in 2024; no dividend is paid, and the share count rose 0.29% over a year.

Valuation, revisions and ownership

Price to free cash flow is 45.66 and EV to EBITDA is 43.69, in the 78th percentile of the sector. Consensus EPS is 4.11 for this fiscal year and 5.26 for next. Institutional ownership is 72.08%, up 2.34% over 3 months, while insiders have sold 723.7M net over 90 days.

Swing trader

Price is below the 20-day and 50-day averages but well above the 200-day, after a drop from 217.41 to 168.25 intraday lows. A 5.51% bounce on Oct 27 came with average volume. Earnings on Nov 3 add event risk.

Trend and momentum

Price of 187.00 is 4.37% below the 20-day average (195.54), 4.44% below the 50-day (195.69) and 13.77% above the 200-day (164.36). RSI is 46.46, MACD is -6.06 below its signal of -3.78, and ADX is 25.99, indicating a moderate trend. The 1-month return is -8.74%.

Recent sessions and levels

The stock fell from 216.74 on Oct 9 to 171.07 on Oct 22, then recovered to 187.00. The Oct 22 selloff came on 8.3M shares. Levels: 20-day low 168.25, 10-day average 181.41, 20-day average 195.54, 52-week high 217.41. ATR is 8.73, or 4.67% of price.

Catalysts and positioning

Earnings are Nov 3 after the close, with 9.28% implied. No analyst upgrades or downgrades occurred in 30 days. Short interest is 12.2M shares (0.97% of float) as of Oct 15, 2026, up 2.28%, with 2.21 days to cover.

Options

Implied volatility is elevated at 57.84% for 30 days, mid-range for the year, with the term structure in backwardation ahead of earnings. Options price a larger move than the stock has typically delivered on earnings. Liquidity is strong.

Volatility level and structure

30-day implied volatility is 57.84%, with an IV rank of 42 and IV percentile of 64 against a 52-week range of 41.14% to 81.02%. IV60 is 53.18% and IV90 is 52.25%, so the curve is in backwardation. The 25-delta skew is -0.6 pts, close to flat.

Implied versus realized

30-day implied volatility is 11.7 pts above 30-day historical volatility of 46.09%, a ratio of 1.25 times. The volatility risk premium is +3.6 pts. 10-day historical volatility is 68.91%, so recent realized moves have run above implied levels.

Earnings move and premium

The implied earnings move is 9.28%, 1.22 times the 4-quarter average move of 8.28% and above the 8-quarter median of 6.04%; the maximum was 15.31%. Average IV crush is 24.32%. For the Nov 27 expiry, the 30-delta put pays 8.00 (53.82% annualized) and the 30-delta call 6.60 (41.56%). The options liquidity score is 89.

Analysis written October 28, 2026 from Qanvo data as of October 27, 2026. AI-generated, for information only; not investment advice.