Is Arista Networks, Inc. (ANET) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $186.17, Arista Networks, Inc. (ANET) trades 164% above TickerWorth's blended fair value of $70.39 per share — a discounted-cash-flow model cross-checked against peer multiples and asset value — meaning the market currently prices ANET overvalued vs our estimate of what the business is intrinsically worth. Our fair value sits below the market, an implied -62.2% move to close the gap if the business performs in line with our assumptions. This is an educational model, not a price target or a recommendation — the value moves with the inputs, which you can test yourself using the WACC slider below.
One of the lenses behind that blended figure is a discounted-cash-flow model, which on its own values ANET at about $60.88 per share. The rest of this page walks through that DCF — its assumptions, reverse-DCF and discount-rate sensitivity — because it is the auditable anchor of the blend.
The valuation discounts Arista Networks, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 15.7%, with a long-run terminal growth rate of 2.5%. About 61% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — ANET would need sustained revenue growth of more than 25%/yr to justify today's price. We don't quote a precise figure here, because past about 25% a year the reverse-DCF stops being informative: it solves for revenue growth alone, holding margins, capital intensity and the forecast horizon fixed, so a price well above our fair value has nowhere to go but growth. The honest reading is that the price implies growth this model can't reconcile — not that we forecast it.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, ANET's modeled DCF value ranges from about $53.46 to $71.69 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Arista Networks, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of ANET's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind ANET's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $9,005,700,000 | FY2025 Form 10-K (filed 2026-02-17) — Consolidated Statements of Income: Total revenue $9,005.7M, +28.6% on FY2024's $7,003.1M. The filed split: product revenue $7,576.9M (84.1% — switching and routing platforms and related network applications) and service revenue $1,428.8M (15.9% — post-contract support contracts sold with the products and their renewals). Growth in FY2025 was product-led (+28.8%) with service close behind (+27.7%) as the installed base expanded. Longer filed path: $5,860.2M (FY2023, +16.9%-ish era), $7,003.1M (FY2024, +19.5%), $9,005.7M (FY2025, +28.6%) — the AI data-center build-out re-accelerated a business that had already compounded for a decade. Geography: Americas 79.1%, EMEA 11.9%, APAC 9.0%. |
| Base EBIT margin | 42.8% | FY2025 Form 10-K (filed 2026-02-17) — Consolidated Statements of Income; Q3 2026 earnings release, 8-K Ex-99.1 (filed 2026-11-03): Income from operations $3,856.1M / revenue $9,005.7M = 42.82%. This is GAAP, so it is AFTER stock-based compensation of $439.2M (4.9% of revenue) and after intangible amortization. The filed margin path: 38.5% (FY2023), 42.1% (FY2024), 42.8% (FY2025), 44.1% in H1 2026 and 44.4% for the nine months of 2026 (Q3 2026 release: operating income $4,178.2M on $9,402.3M) — operating leverage from opex growing slower than revenue. Gross margin, pinned at 64.1% for FY2024 and FY2025, printed 62.9% for the nine months of 2026 (see the forecast margin note). Non-GAAP operating margin (which adds back SBC and intangible amortization) was 49.0% for the nine months of 2026; this model never uses it — see sbc_treatment. |
| Forecast revenue growth | 48% → 30% → 24% → 19% → 15% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | FRED DGS10 — 10-year US Treasury constant maturity yield: Shared house input: the same 5.24% used by every researched model in this tracker (most recently TSLA and APP, 2026-10-26), held so values stay comparable across companies. The current FRED print is lower (4.96% on 2026-10-22); refreshing it for Arista alone would break comparability — it is a tracker-wide update, flagged here rather than smuggled into one company's model. |
| Beta | 2.09 | Assumption — Yahoo Finance ANET quote (delayed) — published beta; own regressions of ANET on the S&P 500 from Yahoo daily/weekly/monthly price history: Measured here against the S&P 500 from Yahoo price history (split-adjusted; Arista split 4-for-1 in December 2024): 1.54 (5Y monthly), 2.11 (3Y monthly), 2.09 (2Y weekly), 2.28 (1Y weekly), 1.89 (2Y daily). The value used, 2.09, is the MEDIAN of the five windows — the APP model's method. Published beta (5Y monthly) is ~1.60 (Yahoo/Finnhub read 1.60-1.62) and cross-checks the measured 5Y window (1.54-1.59) rather than the median. The choice matters and is documented, not hidden: the four shorter windows cluster at 1.89-2.28 and describe the stock Arista has been since the AI networking re-rating began — the 5Y window still carries three pre-2023 years of a slower, lower-beta company. No NVDA/LLY-style normalization is applied (nothing here says the measured company no longer exists; the recent windows ARE the current company), and no shrink either. The explainer prices the alternative plainly: at the published 1.60 the value rises materially but the gap does not close — each 0.1 of beta here is worth about $2 a share (beta 1.99 prints $59.36; beta 2.19 prints $55.45), and at the published 1.60 the value is $69.12, so unlike APP this gap is not mainly a discount-rate artefact. |
| Terminal growth | 2.5% | Assumption — House default — long-run nominal growth ceiling applied across the tracker: Shared house input (2.5%), identical in every researched model in this tracker. |
| Diluted shares | 1,276M | Q3 2026 earnings release, 8-K Ex-99.1 (filed 2026-11-03) — Condensed Consolidated Income Statements, Balance Sheets and Statements of Cash Flows; Financial Outlook (Q4 2026 guidance): Weighted-average DILUTED shares for the nine months ended 2026-09-30: 1,276.0M — UNCHANGED from the first build (Q3 alone: 1,278.2M; FY2025: 1,275.7M). This is the house convention (the META, NVDA and APP models also divide by the weighted diluted count), and Arista presents none of the facts that made TSLA break it: shares issued equals shares outstanding (basic weighted count 1,260.0M for the nine months; the release balance sheet carries no treasury block). For reference, dividing by the 1,260.0M basic count instead would print about 1.3% higher ($61.55 on the Q3 basic print of 1,262.2M). The count is essentially flat — FY2025 repurchases of $1,603.1M were mostly offset by equity-plan issuance, and the Q3 release's cash-flow statement reports NO repurchases in the nine months of 2026 either — so the static denominator is not leaving a buyback tailwind on the table. |
| Market price | $186.17 | Delayed quote · as of 2026-11-10 05:55 UTC |
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