Should You Pick Arista Networks Stock Over Its Competitors?

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Arista Networks (ANET) turns more of its revenue into operating profit than any of the five networking and hardware companies in its peer group. Only Dell Technologies posted faster revenue growth. Over the past year, however, Arista shares have gained less than four of those five rivals, and its P/E sits in the middle of the group. So what do you get for Arista’s price that its rivals do not offer?

Arista Matches Ciena’s Growth At A Lower P/E

Compared with Ciena (CIEN), Arista offers the same growth and far more profit at a lower price for each dollar of earnings. Ciena, another communications equipment maker, grew revenue 32.6% over its latest four fiscal quarters. Arista posted that exact rate over its own four quarters. Arista turned 43.1% of its revenue into operating profit, against 14.1% for Ciena. Ciena’s P/E is still higher, at 78.4, compared with 57.4 for Arista.

The share prices tell a different story. Over the past year, Ciena stock rose 108.7%, while Arista stock climbed 25.8%.

Rivals that cost less than Arista either grew more slowly or retained far less of every sales dollar. Cisco Systems trades at 31.9 times earnings, but its revenue grew 11.8%. Hewlett Packard Enterprise also sits below Arista on both metrics. Dell Technologies is the one rival that grew faster, at 49.0%, and it trades at 27.5 times earnings. Dell, like Hewlett Packard Enterprise, is a technology hardware maker, a different kind of business, and it kept 9.6% of its revenue as operating profit.

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How Arista Earns Its Growth And Its Margin

Arista generates most of its money selling equipment, such as its Etherlink switches, and less from service. Its product segment brought in $7.58 billion of the company’s $9.01 billion revenue in fiscal 2025.

Sales growth picked up in the latest quarter. Arista reported revenue of $3.04 billion for fiscal Q2 2026, up 37.7% from a year earlier. Management said the growth came from its AI and enterprise customers. More than 100 customers have now bought its Etherlink switches for AI, up from four or five in 2024, management said.

Arista also spends little to sell what it makes. Sales and marketing consumed 3.6% of revenue in fiscal Q2 2026, a figure management called a sign of its highly efficient way of selling. That mix of fast growth and low selling costs is what a buyer of Arista stock appears to be paying for.

What Arista Has Promised For Fiscal 2026

On its fiscal Q2 2026 call, management raised its fiscal 2026 outlook for a third time, to 40% revenue growth, or about $12.6 billion. Management also forecast revenue of about $3.3 billion for fiscal Q3 2026, above what Arista reported for the second quarter.

Management named supply as a risk. It expects tight supply and rising component costs to persist across the industry until 2028, though it said Arista has already secured its memory supply for 2026.

At its current price, you are paying for Arista to keep growing near that pace while it holds the widest operating margin in its group. So far the company has done both, and management has kept raising its outlook. Fiscal 2026 revenue growth, against management’s 40% guide, is the number to watch as Arista reports its third quarter and then its full year.

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