Signal Ledger LabSignal Ledger valuation · ANET
Arista Networks, Inc.
What the shares are worth today on our research (cited consensus, company plans and peers, since management sets no usable targets): every line valued at the end of FY2030, net debt rolled forward, then discounted back to Jun 30, 2026.
- Business value at FY2030
- $226B
- FY2030 revenue
- $30B
- FY2030 EPS · P/E
- $10.15 · 22×
- Discount rate (WACC · equity)
- 9.87% · 9.87%
How this is built. The latest public company revenue goal is for FY2026, not a usable later-year sales target; FY2030 revenue uses dated sell-side consensus while GAAP operating margin follows the four-point default. Each input below shows its basis: consensus, company plan, peer or rule.
What each business is worth
| Business | Model | FY2030 revenue | Value today | Per share | 2030 multiple | Value from beyond FY2030 |
|---|---|---|---|---|---|---|
| Cloud and enterprise networking | Margin | $30B | $175B | $138.68 | 15.9× EBIT | 66% |
| All businesses | $30B | $175B | $138.68 |
From 2030 back to today
- Enterprise value at end of FY2030$226B
- Plus net cash at FY2030$52B
- Equity value at FY2030$278B
- ÷ (1 + 9.87%)^4.5 years at the cost of equity$182B
- + dividends paid on the way, discounted$0B
This reconciliation checks the published Signal Ledger valuation against the net-debt path. The difference is 3.3%, inside our 5% tolerance.
From businesses to one share
- All businesses, valued today$175B
- − borrowings$0B
- − finance leases$0B
- + cash and short-term investments$13B
- ÷ diluted shares1.261B
- Signal Ledger valuation$149.26
Year by year to FY2030
| Fiscal year | Revenue | EBITDA | Capex | Free cash flow | Net debt at year end |
|---|---|---|---|---|---|
| FY2026 | $13B | $5.5B | $0.2B | $4.2B | $16B cash |
| FY2027 | $16B | $7B | $0.2B | $5.4B | $22B cash |
| FY2028 | $20B | $8.9B | $0.3B | $6.8B | $29B cash |
| FY2029 | $24B | $11B | $0.3B | $8.7B | $39B cash |
| FY2030 | $30B | $14B | $0.4B | $11B | $52B cash |
What must be true
- Cloud and enterprise networking grows revenue from $12.6B in FY2026 to $30.4B in FY2030 (2.4×).
- Cloud and enterprise networking raises its EBIT margin from 42.8% to 46.8%.
- The company spends $1.4B of capital expenditure through FY2030.
- The company stays net cash throughout (lowest point $13.3B of net cash in FY2025).
What the price implies
To reach $171.07 at our discount rate, Arista Networks, Inc. would need about $35.5B of FY2030 sales (growth of about 29.6% a year from FY2026) with 46.8% GAAP EBIT margin — versus $30.4B and 46.8% GAAP EBIT margin in our research.
At the research price of $171.07 (2026-10-23), the price asks more than our assumptions overall. These are operating requirements at that price, not additional valuations or forecasts.
If sales and margins changed together
Each row matches the same research price at our unchanged discount rate, by scaling every operating line's margin by one common factor. Sales cover margin and capacity lines only; other valuation lines stay fixed. Margins are revenue-weighted within each metric, before separately modeled corporate costs and eliminations. The conclusion uses the row at our research margins when sales alone can match the price, otherwise the solved row needing the least sales growth; this is a trade-off between growth and profitability, not a forecast.
| FY2030 sales factor | FY2030 sales | FY2026–30 CAGR | Required FY2030 margin | Requirement |
|---|---|---|---|---|
| 1.17×At research margins | $35.5B | 29.6% | 46.8% GAAP EBIT | Within margin guardrails |
| 1.50× | $45.6B | 38.0% | 37.0% GAAP EBIT | Within margin guardrails |
| 2.00× | $60.8B | 48.2% | 28.2% GAAP EBIT | Within margin guardrails |
| 3.00× | $91.3B | 64.1% | 19.2% GAAP EBIT | Within margin guardrails |
CAGR uses $12.6B of same-scope FY2026 sales from the published model or its sourced research base, over four fiscal years. “Within margin guardrails” checks numeric limits only, not commercial plausibility. Each line and year must stay at or below 50.0% GAAP EBIT and 100% EBITDA, or our research margin where that is higher; capacity EBIT uses the engine's equipment depreciation. Unsolved margins are not extrapolated.
- Implied discount rate
- 9.0%
- All-business FY2030 sales factor
- 1.17×
The WACC that makes model value equal the price, shifting WACC and cost of equity by the same amount. Model: 9.9% WACC · 9.9% cost of equity.
FY2030 revenue would need to reach $35.5B (model: $30.4B) across the margin and capacity businesses. FY1 stays fixed; the sales change ramps to FY2030 and stays at that factor thereafter.
If only one business changed
Businesses with margin or capacity revenue paths, ordered by value today. Revenue and margin are separate alternatives; these requirements are not added together.
Cloud and enterprise networking
- Revenue alone
- FY2030 revenue would need to reach $35.3B (model: $30.4B).
- Margin alone
FY2030 EBIT margin would need to reach 54.1% (model: 46.8%).
Mechanical requirements, not forecasts. The separate sales-only and single-business factors are searched from 0.1× to 6×; an unsolved comparison means this business alone cannot get there within those bounds. Single-business revenue changes apply from FY2 onward; margin changes scale the full EBIT or EBITDA margin path. Mixed groups show revenue-weighted EBIT and EBITDA margins separately. Requirements above 100% are not feasible margins. Joint rows instead search non-negative uniform margin factors only up to the EBIT/EBITDA guardrails; the entire margin path scales, including post-FY2030 convergence. Sales and margins change together only in that table. The rate search runs from the largest terminal growth rate plus 0.5 percentage points to 30% WACC.
The discount rate
- Cost of equity
- 9.87%
- WACC
- 9.87%
- 10-year Treasury · model / spot
- 3.87% · 5.13%
r_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 1.20 after Blume adjustment × 5%, rounded to 0.01% (1bp)
methodology §4.5: market-weighted WACC, not rounded
The model uses the recorded 5-year average Treasury yield. The spot yield is shown for context.
Every input, with its source
Show 13 inputs · reported, guidance and rule-based
| Input | Value | Basis | Why |
|---|---|---|---|
| Revenue FY2026Cloud and enterprise networking | $12.6B | Guidance | target (methodology §4.2), growth 39.9% chartmill.com ↗ |
| Revenue FY2030Cloud and enterprise networking | $30.4B | Guidance | target (methodology §4.2), growth 24.7% chartmill.com ↗ |
| EBIT margin FY2030Cloud and enterprise networking | 46.8% | Rule | linear path to 46.8% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 27.6% to FY2030; no cited expansion evidence) investors.arista.com ↗ |
| Maintenance capexCloud and enterprise networking | 1.3% | Reported | FY2025 capex $0.120B / revenue, above depreciation. investors.arista.com ↗ |
| Terminal growthCloud and enterprise networking | 3.0% | Rule | methodology §4.2 terminal growth for a growth line Valuation methodology §4.2 · Read methodology ↗ |
| WACCDiscount rates | 9.87% | Rule | methodology §4.5: market-weighted WACC, not rounded FRED DGS10 2021-10-20..2026-10-21 |
| Cost of equityDiscount rates | 9.87% | Rule | r_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 1.20 after Blume adjustment × 5%, rounded to 0.01% (1bp) 60 monthly returns vs SPY, 2021-09..2026-09 (adjusted closes) |
| Tax rateDiscount rates | 21.0% | Rule | Forward effective tax guidance and three-year cash tax average not verified; use explicit 21% statutory fallback, not SBC-related discrete tax windfalls. uscode.house.gov ↗ |
| Cash and short-term investmentsBalance sheet | $13.3B | Reported | cash, cash equivalents and short-term investments us-gaap:CashAndCashEquivalentsAtCarryingValue + us-gaap:AvailableForSaleSecuritiesDebtSecuritiesCurrent · 0001596532-26-000175 (filed 2026-08-05) |
| BorrowingsBalance sheet | $0.0B | Reported | borrowings due within a year plus long-term borrowings; no positive borrowing facts in available SEC observations since 2023-01-01; three full fiscal years checked; balance sheet liabilities fully tagged and reconciled, with no debt row sec.gov ↗ · data.sec.gov ↗ |
| Finance leasesBalance sheet | $0.0B | Reported | no finance lease liability reported balance sheet 2026-06-30 |
| SharesBalance sheet | 1.261B | Reported | shares outstanding as of 2026-07-30 cover page of 10-Q 0001596532-26-000175 |
| Dividends per yearShareholders | $0.0B | Reported | No cash dividend; returns through repurchases. × 1.261B shares investors.arista.com ↗ |
Research notes
- share-count comparison: 1.276B quarter 2026-04-01..2026-06-30 · 0001596532-26-000175; point-in-time denominator retained
- cost of equity 9.87% (β 1.20 after Blume adjustment), WACC 9.9%
Signal Ledger research built from cited consensus, company plans and peer economics because management sets no usable targets — not a forecast and not investment advice. The research desk (GPT-6.1 (Codex)) gathers filings, guidance and targets; deterministic code applies the samepublished rules to every company and checks the result. Inputs may contain errors; follow the source links before relying on them. Read our valuation methodology →