Is Arista Networks Stock Really Expensive?

For questions about this article or underlying research, email help@trefis.com.

At its October 29, 2026 close of $184.22 a share, Arista Networks (ANET) stock trades at 52.4 times its adjusted earnings for the twelve months to June 2026. Those earnings add stock-based pay back after tax, and that multiple is a steep price for a single year’s profit. That valuation looks different, however, once you set it against the profit Arista is forecast to earn over the next two years. So is Arista stock expensive on the profit still to come, too?

What You Pay For Arista’s Forecast Profit

Partly. Based on the consensus forecast, the same share price is 44.1 times Arista’s expected profit for fiscal 2026 and 34.7 times its expected profit for fiscal 2027. Both multiples sit below the 52.4 times valuation placed on the past twelve months of adjusted earnings, so the price is less steep on forecast profit.

The fiscal 2026 price is the firmer of the two. Arista’s fiscal year runs to December, and the company has already reported the first two quarters of it. The forecast for fiscal 2027 is less certain, with the highest and lowest estimates of earnings per share 16.2% apart, measured against the average estimate. Estimates for fiscal 2026 span a much narrower range, running from $4.04 to $4.21 a share.

What Arista Must Deliver To Match The Forecast

Arista has to speed up sales of its networking gear in the second half of fiscal 2026. For fiscal 2026, the consensus forecast calls for revenue of $12.7 billion, in line with management’s own outlook of about $12.6 billion. That outlook equals 40% revenue growth, a faster pace than either quarter Arista has reported so far in fiscal 2026. Management raised that outlook on the August 4, 2026 call, marking its third increase of 2026.

The consensus forecast then shows Arista’s revenue rising 30.4% in fiscal 2027, to $16.5 billion. That pace is slightly slower than the 32.6% growth Arista reported over the twelve months to June 2026, and the June quarter grew faster still, at 37.7% from a year earlier.

Arista also does not need to earn more on each dollar of sales. The consensus forecast puts its net margin at 41.5% for fiscal 2026, closely tracking the 41.3% it earned in fiscal 2025. For fiscal 2027 the forecast margin is 40.4%, so the extra profit comes from more sales, not a richer margin.

Where Arista Could Miss Its Forecast

One area Arista could miss its forecast is fiscal 2027 sales, if it cannot get enough parts. Management said on the August 4 call that the company’s supply position is improving, and that its memory supply is secured for 2026, with visibility well into 2027. But management also said industry-wide supply tightness and rising component costs persist. If parts run short in 2027, the sales forecast for fiscal 2027 would be too high.

The margin is the other area. Management kept its own adjusted gross margin range for fiscal 2026 at 62% to 64%, a range it said includes expected cost increases for memory and silicon. It also said price increases will help only toward the end of 2026 or in 2027, because Arista is still working through a lot of backlog sales. If costs rise by more than management expects before prices catch up, the net margin in the forecast would be too high, and so would the profit.

Arista is expected to report its September quarter in November 2026. Its revenue against management’s guide of about $3.3 billion is the number to watch.

If Arista delivers the sales in the forecast at about the margin it earned in fiscal 2025, the forecast multiples are an honest measure of what you pay today. Where the forecast falls short, it is most likely to be in fiscal 2027 sales, if parts stay scarce, or in the margin, if costs climb before prices do. In either case, you would own a stock priced on profit Arista did not deliver, and that is a riskier holding than its forecast multiples show.

A price set on forecast growth holds only if that growth arrives. Look at Tesla, still priced at about $1.3 trillion, about 13 times sales, after its deliveries fell two years in a row before a partial rebound this year. Read Trefis Big Story: How Tesla Blundered.

Does This Mean You Should Act On ANET?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

There is a smarter approach. Since its inception, the Trefis High Quality (HQ) Portfolio has returned 105%, beating the benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking. If that is how you want to invest, the HQ Portfolio is the place to start.

Spot an error or want more like this? Tell us in 10 seconds.