ANET
Arista Networks, Inc.
$154.03
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 8.5% above fair value
You pay
$154.03
Bear
$86.26
Fair
$141.92
Bull
$209.31
Bear
$86.26
-44.0%
11% stage 1 growth, 12% discount
Fair
$141.92
-7.9%
19% stage 1 growth, 12% discount
Bull
$209.31
+35.9%
24% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
41%
Implied Market Multiple
46.7x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $183.30 from 52 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $141.92 per share.
Warnings
Wall Street's average price target is $183.30 (from 52 analysts). Our estimate is 35% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions