With Arista Networks Stock Down 5.9% In A Day, How Confident Are You?

Arista Networks (ANET) stock is down 5.9% in a day. Already own the stock? You might want to consider holding it. Planning to buy? This might be your opportunity. Consider the following data:

• Size: Arista Networks is a $174 Bil company with $8.0 Bil in revenue currently trading at $138.79.
• Fundamentals: Last 12 month revenue growth of 26.0% and operating margin of 43.1%.
• Liquidity: Has Debt to Equity ratio of 0.0 and Cash to Assets ratio of 0.53
• Valuation: Arista Networks stock is currently trading at P/E multiple of 53.6 and P/EBIT multiple of 50.8
• Has returned (median) 74.8% within a year following sharp dips since 2010. See ANET Dip Buy Analysis.

While we like to buy dips if the fundamentals check out – for ANET, see Buy or Sell ANET Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and ANET drops another 20-30% to $97 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience. Turns out, the stock saw an impact slightly worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

ANET stock has fallen meaningfully recently and we currently find it attractive but volatile. While this may feel like an opportunity, there is significant risk in relying on a single stock. On the other hand, there is a huge value to a broader diversified approach. If you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio (HQ) – HQ has outperformed its benchmark – a combination of S&P 500, Russell, and S&P midcap index, and achieved returns exceeding 105% since its inception. Risk management is key – consider, what could long-term portfolio performance be if you blended 10% commodities, 10% gold, and 2% crypto with HQ’s performance metrics.

Below are the details, but before that, as a quick background: ANET provides cloud networking solutions and comprehensive post-contract support, including technical assistance, hardware repair, and software updates across global markets.

2022 Inflation Shock

• ANET stock fell 38.4% from a high of $36.71 on 27 December 2021 to $22.61 on 16 June 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 8 March 2023
• Since then, the stock increased to a high of $158.23 on 9 October 2025 , and currently trades at $138.79

2020 Covid Pandemic

• ANET stock fell 34.0% from a high of $14.88 on 24 January 2020 to $9.81 on 16 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 23 July 2020

2018 Correction

• ANET stock fell 43.6% from a high of $20.53 on 16 April 2019 to $11.58 on 1 November 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 20 May 2021

Worried that ANET could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.