Number Cruncher Extra

Number Cruncher Extra: Arista Networks Inc

By February 25, 2020 No Comments

Following our article in the Globe and Mail, here is a Number Cruncher Extra for our readers about our top pick of the week Arista Networks Inc.

In our system, Arista Networks comes out with a positive outlook of 58. The performance score is close to 78 showing a strong performing company while the risk score of 47 displays a medium risk company. Arista Networks had sale growth of 30,8% annually and earnings growth of 74.7% in the last 5 years. The performance spread, which represents the difference between the return on capital and the cost of capital, grew by 12.3% in the last five years and is now close to 14%.

Here, we can see the company continues to add value through its EVA and the trailing twelve months NOPAT grew at almost every quarter. The NOPAT exploded in the last 5 years from $162.7M$ to 876.1M$. The return on capital is higher than 5 years ago, but the cost of capital increased also because of the volatility of the stock. The performance spread is still higher than 5 years ago showing a company that creates value for their shareholders.

 

Compared to peers, the stock does well overall and is often in the top of the list for the quality, value, growth and risk factor. first of a list of 10 companies, Arista Networks does particularity well on the quality factor.