ANET
Arista Networks, Inc.
$168.56
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 17.8% above fair value
You pay
$168.56
Bear
$86.98
Fair
$143.10
Bull
$211.05
Bear
$86.98
-48.4%
11% stage 1 growth, 12% discount
Fair
$143.10
-15.1%
19% stage 1 growth, 12% discount
Bull
$211.05
+25.2%
24% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
41%
Implied Market Multiple
51.4x
Market is pricing in (growth)
23.7%
vs 18.7% base
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 $186.67 from 52 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $143.10 per share.
Warnings
Wall Street's average price target is $186.67 (from 52 analysts). Our estimate is 36% 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