Contrasting Arista Networks (ANET) & F5 Networks (FFIV)

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Arista Networks (NYSE: ANET) and F5 Networks (NASDAQ:FFIV) are both large-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, analyst recommendations, valuation and profitability.

Earnings & Valuation

This table compares Arista Networks and F5 Networks’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Arista Networks $1.65 billion 12.32 $423.20 million $4.65 58.63
F5 Networks $2.09 billion 5.01 $420.76 million $6.46 26.54

Arista Networks has higher earnings, but lower revenue than F5 Networks. F5 Networks is trading at a lower price-to-earnings ratio than Arista Networks, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

53.4% of Arista Networks shares are held by institutional investors. Comparatively, 94.2% of F5 Networks shares are held by institutional investors. 25.0% of Arista Networks shares are held by company insiders. Comparatively, 0.3% of F5 Networks shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Arista Networks and F5 Networks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arista Networks 27.19% 27.23% 18.31%
F5 Networks 20.43% 37.01% 18.25%

Risk & Volatility

Arista Networks has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500. Comparatively, F5 Networks has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Arista Networks and F5 Networks, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arista Networks 1 14 17 0 2.50
F5 Networks 2 16 7 0 2.20

Arista Networks presently has a consensus price target of $263.14, indicating a potential downside of 3.49%. F5 Networks has a consensus price target of $151.60, indicating a potential downside of 11.59%. Given Arista Networks’ stronger consensus rating and higher probable upside, analysts plainly believe Arista Networks is more favorable than F5 Networks.

Summary

Arista Networks beats F5 Networks on 10 of the 14 factors compared between the two stocks.

About Arista Networks

Arista Networks, Inc. provides cloud networking solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. The company's cloud networking solutions consist of its extensible operating systems, a set of network applications, as well as gigabit Ethernet switching and routing platforms, including universal leaf, spline, and universal spine products. It also provides post contract customer support services, such as technical support, hardware repair and parts replacement beyond standard warranty, bug fix, patch, and upgrade services. The company serves a range of industries comprising Internet companies, service providers, financial services organizations, government agencies, media and entertainment companies, and others. It markets and sells its products through distributors, value-added resellers, system integrators, and original equipment manufacturer partners, as well as through its direct sales force. The company was formerly known as Arastra, Inc. and changed its name to Arista Networks, Inc. in October 2008. Arista Networks, Inc. was founded in 2004 and is headquartered in Santa Clara, California.

About F5 Networks

F5 Networks, Inc. develops, markets, and sells application delivery networking products that optimize the security, performance, and availability of network applications, servers, and storage systems. The company's primary application delivery technology is Traffic Management Operating System (TMOS) that enable company's products to intercept, inspect, and act on the contents of traffic from virtually each type of Internet Protocol-enabled application. It offers Local Traffic Manager, which provides intelligent load-balancing, traffic management, and application health checking; BIG-IP DNS that automatically directs users to the closest or best-performing physical, virtual, or cloud environment; Advanced Firewall Manager, a network firewall; and Application Security Manager, an Web application firewall that provides comprehensive, proactive, and application-layer protection against generalized and targeted attacks. The company also provides Access Policy Manager, which provides secure, granular, and context-aware access to networks and applications; Carrier-Grade Network Address Translation, which offers a set of tools that enables service providers to migrate to IPv6 while continuing to support and interoperate with existing IPv4 devices and content; and Policy Enforcement Manager that offers traffic classification capabilities to identify the specific applications and services to service providers, as well as Link Controller. In addition, it offers cloud-based and other subscription services; BIG-IP appliances; VIPRION chassis-based systems; BIG-IP Virtual Edition software platform; and management and orchestration software platform. The company sells its products to enterprise customers and service providers through distributors, value-added resellers, and systems integrators in the Americas, Europe, the Middle East, Africa, Japan, and the Asia Pacific Region. F5 Networks, Inc. was founded in 1996 and is headquartered in Seattle, Washington.

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