ANET
Arista Networks, Inc.
$184.33
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 54.3% above fair value
You pay
$184.33
Bear
$72.60
Fair
$119.44
Bull
$176.17
Bear
$72.60
-60.6%
11% stage 1 growth, 12% discount
Fair
$119.44
-35.2%
19% stage 1 growth, 12% discount
Bull
$176.17
-4.4%
24% stage 1 growth, 12% discount
Adjust Assumptions
18.7%
12.0%
3.0%
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
41%
Implied Market Multiple
56.5x
Market is pricing in (growth)
25.0%
vs 18.7% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (53 analysts)
$226.64
Divergence from AlphaVal
47%
Summary
Using a two-stage FCF DCF with 19% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $119.44 per share.
Warnings
Wall Street's average price target is $226.64 (from 53 analysts). Our estimate is 47% 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