Is Arista Networks, Inc. overvalued or undervalued?

As of 7 July 2025, the valuation grade for Arista Networks, Inc. moved from expensive to fair. The company appears to be fairly valued based on its metrics, with a P/E ratio of 40, a Price to Book Value of 12.07, and an EV to EBITDA of 35.58. In comparison, its peer, which has a P/E of 54.30 and an EV to EBITDA of 47.92, suggests that Arista is positioned more attractively within its industry.
The company's strong ROCE of 159.60% and ROE of 29.82% further support its valuation, indicating efficient use of capital and shareholder equity. Notably, Arista has outperformed the S&P 500 over multiple periods, with a 1-year return of 62.19% compared to the S&P 500's 17.14%, highlighting its robust performance relative to the broader market.