Stock Analysis on Net

Arista Networks Inc. (NYSE:ANET)

Analysis of Profitability Ratios

Microsoft Excel

Profitability Ratios (Summary)

Arista Networks Inc., profitability ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Return on Sales
Gross profit margin 61.95% 61.07% 63.80% 63.94% 64.06%
Operating profit margin 38.52% 34.86% 31.37% 30.19% 33.42%
Net profit margin 35.62% 30.87% 28.52% 27.38% 35.67%
Return on Investment
Return on equity (ROE) 28.91% 27.68% 21.13% 19.11% 29.71%
Return on assets (ROA) 20.98% 19.96% 14.66% 13.39% 20.54%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Profitability ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Arista Networks Inc. gross profit margin ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Arista Networks Inc. operating profit margin ratio improved from 2021 to 2022 and from 2022 to 2023.
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Arista Networks Inc. net profit margin ratio improved from 2021 to 2022 and from 2022 to 2023.

Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. Arista Networks Inc. ROE improved from 2021 to 2022 and from 2022 to 2023.
ROA A profitability ratio calculated as net income divided by total assets. Arista Networks Inc. ROA improved from 2021 to 2022 and from 2022 to 2023.

Gross Profit Margin

Arista Networks Inc., gross profit margin calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Gross profit 3,630,281 2,675,696 1,880,779 1,481,886 1,544,338
Revenue 5,860,168 4,381,310 2,948,037 2,317,512 2,410,706
Profitability Ratio
Gross profit margin1 61.95% 61.07% 63.80% 63.94% 64.06%
Benchmarks
Gross Profit Margin, Competitors2
Apple Inc. 44.13% 43.31% 41.78% 38.23% 37.82%
Cisco Systems Inc. 62.73% 62.55% 64.02% 64.26% 62.94%
Super Micro Computer Inc. 18.01% 15.40% 15.03% 15.76% 14.16%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenue
= 100 × 3,630,281 ÷ 5,860,168 = 61.95%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Arista Networks Inc. gross profit margin ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

Operating Profit Margin

Arista Networks Inc., operating profit margin calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Income from operations 2,257,249 1,527,106 924,739 699,684 805,774
Revenue 5,860,168 4,381,310 2,948,037 2,317,512 2,410,706
Profitability Ratio
Operating profit margin1 38.52% 34.86% 31.37% 30.19% 33.42%
Benchmarks
Operating Profit Margin, Competitors2
Apple Inc. 29.82% 30.29% 29.78% 24.15% 24.57%
Cisco Systems Inc. 26.37% 27.09% 25.76% 27.63% 27.39%
Super Micro Computer Inc. 10.68% 6.45% 3.48% 2.57% 2.78%
Operating Profit Margin, Sector
Technology Hardware & Equipment 29.20% 29.70% 29.10% 24.49% 24.86%
Operating Profit Margin, Industry
Information Technology 26.21% 28.31% 28.72% 24.93% 25.33%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Operating profit margin = 100 × Income from operations ÷ Revenue
= 100 × 2,257,249 ÷ 5,860,168 = 38.52%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Arista Networks Inc. operating profit margin ratio improved from 2021 to 2022 and from 2022 to 2023.

Net Profit Margin

Arista Networks Inc., net profit margin calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Net income 2,087,321 1,352,446 840,854 634,557 859,867
Revenue 5,860,168 4,381,310 2,948,037 2,317,512 2,410,706
Profitability Ratio
Net profit margin1 35.62% 30.87% 28.52% 27.38% 35.67%
Benchmarks
Net Profit Margin, Competitors2
Apple Inc. 25.31% 25.31% 25.88% 20.91% 21.24%
Cisco Systems Inc. 22.13% 22.91% 21.26% 22.75% 22.39%
Super Micro Computer Inc. 8.98% 5.49% 3.14% 2.52% 2.05%
Net Profit Margin, Sector
Technology Hardware & Equipment 24.78% 24.87% 25.16% 21.05% 21.32%
Net Profit Margin, Industry
Information Technology 22.04% 23.93% 25.58% 21.38% 22.17%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Net profit margin = 100 × Net income ÷ Revenue
= 100 × 2,087,321 ÷ 5,860,168 = 35.62%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Arista Networks Inc. net profit margin ratio improved from 2021 to 2022 and from 2022 to 2023.

Return on Equity (ROE)

Arista Networks Inc., ROE calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Net income 2,087,321 1,352,446 840,854 634,557 859,867
Stockholders’ equity 7,219,059 4,885,820 3,978,600 3,320,291 2,894,686
Profitability Ratio
ROE1 28.91% 27.68% 21.13% 19.11% 29.71%
Benchmarks
ROE, Competitors2
Apple Inc. 156.08% 196.96% 150.07% 87.87% 61.06%
Cisco Systems Inc. 28.44% 29.70% 25.66% 29.57% 34.62%
Super Micro Computer Inc. 32.45% 20.00% 10.20% 7.91% 7.64%
ROE, Sector
Technology Hardware & Equipment 97.10% 117.05% 97.06% 64.42% 53.02%
ROE, Industry
Information Technology 31.78% 38.36% 42.36% 35.12% 36.53%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 2,087,321 ÷ 7,219,059 = 28.91%

2 Click competitor name to see calculations.

Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. Arista Networks Inc. ROE improved from 2021 to 2022 and from 2022 to 2023.

Return on Assets (ROA)

Arista Networks Inc., ROA calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Net income 2,087,321 1,352,446 840,854 634,557 859,867
Total assets 9,946,806 6,775,410 5,734,429 4,738,919 4,185,290
Profitability Ratio
ROA1 20.98% 19.96% 14.66% 13.39% 20.54%
Benchmarks
ROA, Competitors2
Apple Inc. 27.51% 28.29% 26.97% 17.73% 16.32%
Cisco Systems Inc. 12.38% 12.57% 10.86% 11.82% 11.88%
Super Micro Computer Inc. 17.42% 8.90% 4.99% 4.39% 4.27%
ROA, Sector
Technology Hardware & Equipment 24.00% 24.80% 23.27% 16.30% 15.34%
ROA, Industry
Information Technology 13.01% 14.99% 15.62% 12.12% 12.78%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 2,087,321 ÷ 9,946,806 = 20.98%

2 Click competitor name to see calculations.

Profitability ratio Description The company
ROA A profitability ratio calculated as net income divided by total assets. Arista Networks Inc. ROA improved from 2021 to 2022 and from 2022 to 2023.