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    Arista Networks, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 94.94

    Market price

    USD 164.14

    Implied upside

    -42.2%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedNo debt figure was reported for the latest year, so the 2022-12-31 figure is used. Override net debt if it has changed.
    AdjustedReported capital expenditure averages just 0.85% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.32% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.

    Current EV/EBITDA of 50.0x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 94.94-42.2%
    Exit multiple
    USD 154.21-6.0%
    Market price
    USD 164.14

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn7bn14bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 12.7bnUSD 16.4bnUSD 20.6bnUSD 25.2bnUSD 30.0bnUSD 34.7bnUSD 39.0bnUSD 42.6bnUSD 45.1bnUSD 46.2bn+15.4%
    EBITUSD 5.0bnUSD 6.5bnUSD 8.1bnUSD 10.0bnUSD 11.9bnUSD 13.7bnUSD 15.4bnUSD 16.9bnUSD 17.8bnUSD 18.3bn+15.4%
    NOPATUSD 4.3bnUSD 5.6bnUSD 7.0bnUSD 8.6bnUSD 10.2bnUSD 11.8bnUSD 13.3bnUSD 14.5bnUSD 15.3bnUSD 15.7bn+15.4%
    Add depreciation & amortisationUSD 137.2mUSD 177.0mUSD 222.5mUSD 272.4mUSD 324.4mUSD 375.5mUSD 422.3mUSD 460.8mUSD 487.6mUSD 499.8m+15.4%
    Less capital expenditureUSD -167.2mUSD -269.0mUSD -405.2mUSD -578.0mUSD -786.0mUSD -1.0bnUSD -1.3bnUSD -1.5bnUSD -1.8bnUSD -2.0bn+31.5%
    Capex, % of revenue1.3%1.6%2.0%2.3%2.6%2.9%3.3%3.6%3.9%4.3%-
    Less increase in working capitalUSD -1.5bnUSD -1.5bnUSD -1.7bnUSD -1.9bnUSD -2.0bnUSD -1.9bnUSD -1.8bnUSD -1.5bnUSD -1.0bnUSD -462.5m-12.3%
    Free cashflow to firmUSD 2.8bnUSD 4.0bnUSD 5.1bnUSD 6.4bnUSD 7.7bnUSD 9.2bnUSD 10.6bnUSD 11.9bnUSD 13.0bnUSD 13.8bn+19.5%
    Discount factor0.94950.85590.77160.69560.62710.56530.50960.45940.41410.3733-
    Present valueUSD 2.6bnUSD 3.4bnUSD 3.9bnUSD 4.4bnUSD 4.9bnUSD 5.2bnUSD 5.4bnUSD 5.5bnUSD 5.4bnUSD 5.1bn-
    Present Value Of The ForecastUSD 45.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.427Reported 1.637, pulled toward 1.0 (Blume)
    Cost of equity10.93%Risk-free + beta x equity risk premium
    Cost of debt6.89%Assumed: risk-free + 200bp (interest expense not reported)
    Market capitalisationUSD 207.0bn100.0% of capital
    Total debtUSD 44.0m0.0% of capital, book value as a proxy
    Tax rate14.2%Effective, capped at statutory
    WACC10.93%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 94.94

    58% of EV

    Forecast FCFF, final year
    USD 13.8bn
    Capex at depreciation, working capital in reinvestment
    USD 15.7bn
    Less reinvestment at g/ROIC (9.3% of NOPAT)
    USD -1.5bn
    Capitalised
    USD 14.2bn
    ROIC (reported)
    26.8%
    Terminal value, undiscounted
    USD 173.0bn
    Terminal value, discounted
    USD 64.6bn
    Enterprise value
    USD 110.4bn
    Less net debt
    USD -10.7bn
    Equity value
    USD 121.1bn

    Exit at 20.0x EBITDA

    Value per shareUSD 154.21

    75% of EV

    Terminal value, undiscounted
    USD 375.5bn
    Terminal value, discounted
    USD 140.2bn
    Enterprise value
    USD 186.0bn
    Less net debt
    USD -10.7bn
    Equity value
    USD 196.7bn

    Spread between methods: 48%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.93%119.60123.03127.06131.84137.58
    9.93%104.03106.22108.77111.74115.23
    10.93%91.8993.3194.9496.8299.01
    11.93%82.1983.1084.1485.3586.73
    12.93%74.2774.8475.5076.2677.14

    Outlined: this model. Green text: above today's price of 164.14. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year27.1%17.8%25.9%
    EBIT margin42.8%39.6%68.5%
    Discount rate-10.9%7.6%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.