Arista Networks vs Cisco Systems
VS
Last updated:
(18h 29m ago) •
ANET at $169.22, CSCO at $115.60
CleaRank Financial AI •
Data from
TwelveData &
CoinGecko
Reviewed by CleaRank editorial team. Data refreshed daily. Not financial advice.
Comparative Analysis
ANET emerges as the superior investment based on its significantly stronger growth trajectory and superior profitability metrics. While CSCO presents a more mature, dividend-paying profile, ANET's exceptional revenue growth and profit margins indicate a company in a more dynamic expansion phase. ANET's current valuation, though higher on a P/E basis, is justified by its faster growth. CSCO's larger market capitalization suggests stability but lacks the explosive potential seen in ANET. Investors prioritizing capital appreciation driven by rapid business expansion should favor ANET.
Key Differentiator
The decisive factor separating ANET and CSCO is their growth profile. ANET's 35.1% revenue growth and superior profitability metrics (net profit margin, ROE, ROA) clearly indicate a company in a high-growth phase, justifying its premium valuation. CSCO, while stable and profitable, exhibits characteristics of a mature business with significantly lower growth rates.
Joint Outlook
The outlook for ANET is strongly tied to its ability to sustain its high growth trajectory and profitability. If it continues to execute, its valuation could expand further. However, a miss on growth expectations poses a significant downside risk. For CSCO, the outlook is more stable, characterized by steady, albeit slower, growth and dividend payouts. Its performance will likely be more correlated with broader market trends and enterprise spending cycles. A potential catalyst for CSCO could be successful integration of recent acquisitions or a shift towards higher-margin software services.
Price Analysis Comparison
Valuation Metrics
| Metric | ANET | CSCO |
|---|---|---|
| P/E Ratio | 58.68 | 38.19 |
| Market Cap | 215.02B | 451.57B |
| Price/Sales | 22.14 | 7.43 |
| Price/Book | 15.94 | 9.24 |
| EV/EBITDA | 47.83 | 27.51 |
| Dividend Yield | N/A | N/A |
ANET trades at a P/E ratio of 58.68, considerably higher than CSCO's 38.19. This premium reflects ANET's aggressive growth. CSCO's lower P/E suggests it may be undervalued relative to its earnings, or that the market anticipates slower future growth. ANET's market capitalization of $215 billion is substantial, yet significantly smaller than CSCO's $451 billion, implying ANET has more room for expansion relative to its current size. The price-to-book or price-to-sales ratios would offer further clarity, but based on P/E, CSCO appears cheaper on a standalone earnings basis, while ANET commands a premium for its growth.
Profitability & Efficiency
| Metric | ANET | CSCO |
|---|---|---|
| Rev. Growth (Qtly) | 35.10% | 12.00% |
| Profit Margin | 38.32% | 19.69% |
| Return on Equity | 31.52% | 25.23% |
| Return on Assets | 14.36% | 7.34% |
| Debt/Equity | 0.00 | 67.54 |
ANET significantly outperforms CSCO in profitability. ANET boasts a net profit margin of 38.32% and a return on equity of 31.52%, both substantially higher than CSCO's 19.69% net profit margin and 25.23% return on equity. Furthermore, ANET's return on assets at 14.36% is nearly double CSCO's 7.34%. These metrics indicate ANET is far more efficient at converting revenue into profit and generating returns for shareholders from its asset base.
Earnings Reality Check
ANET
Last 5 Qs: ANET beat estimates 5x out of 5. Rose 3x after beats.
CSCO
Last 3 Qs: CSCO beat estimates 3x out of 3. Fell 2x after beats. (Sell the news?)
Technical Indicators
| Indicator | ANET | CSCO |
|---|---|---|
| RSI (14) | 36.11 | 53.23 |
| 50-Day MA | $164.89 | $117.88 |
| 200-Day MA | $145.60 | $88.83 |
Technically, ANET is showing signs of weakness, trading below its 20-day EMA ($171.88) and with an RSI of 36.11, indicating it is in oversold territory. Its MACD is positive but trending lower. CSCO, conversely, is trading near its 20-day EMA ($114.58) and exhibits a more neutral RSI of 53.23. CSCO's MACD is negative and trending lower, suggesting some bearish momentum. ANET's price is currently below its 50-day SMA ($164.89), while CSCO is below its 50-day SMA ($117.88). Both are trading above their 200-day SMAs, indicating longer-term uptrends remain intact, but ANET's current technicals are weaker.
AI Analyst Sentiment
ANET
Sell
Technical Score: 25/100
CSCO
Hold
Technical Score: 55/100
Given the provided data, a direct sentiment analysis is challenging. However, ANET's high P/E ratio suggests strong market optimism and high growth expectations are already priced in. CSCO's lower P/E might indicate more tempered expectations or a value-oriented investor base. Without analyst ratings or institutional positioning data, a definitive conclusion on sentiment is not possible.
Note: While CSCO shows stronger short-term technical momentum (Hold 55/100), the AI comparative analysis favors ANET (Sell 25/100) based on its overall trend structure, fundamentals, and risk-adjusted outlook.
Risk Stratification
| Metric | ANET | CSCO |
|---|---|---|
| Beta (Volatility) | 1.60 | 1.01 |
| Sharpe Ratio | 0.83 | 1.43 |
The primary risk for ANET lies in its high valuation and the potential for growth expectations to falter. A slowdown in its 35.1% revenue growth could lead to a significant P/E multiple contraction. Its technical indicators also suggest short-term weakness. For CSCO, the main risk is the potential for its mature business model to face increased competition or disruption, especially from more agile players like ANET. Its slower growth rate limits upside potential, and a broader market downturn could impact its dividend appeal.
Comparative ProTips
- Prioritize ANET for capital appreciation driven by high growth, accepting the higher valuation risk.
- Consider CSCO for a more stable, income-generating investment with moderate growth prospects.
- Monitor ANET's revenue growth rate closely; any significant slowdown could trigger a reassessment of its valuation.
Monte Carlo Projection (10yr)
Actionable Trade Plans
Compare entry, exit, and risk management levels for both assets
Select Your Trade Bias
Risk Tolerance
Conservative
3%
Aggressive
Portfolio Value
$
✎
Position Size: $200 - $300 per asset
ANET
Current: $169.22
ENTRY ZONES
Conservative
$172.60
Aggressive
$169.22
RISK MANAGEMENT
STOP LOSS
$177.78
MAX LOSS
-3%
Volatility-Adjusted Stop Loss
Calculated based on volatility and technical support levels.
Profit Targets (Based on Conservative)
+5%
$163.97
+10%
$155.34
+15%
$146.71
CSCO
Current: $115.60
ENTRY ZONES
Conservative
$117.91
Aggressive
$115.60
RISK MANAGEMENT
STOP LOSS
$121.45
MAX LOSS
-3%
Volatility-Adjusted Stop Loss
Calculated based on volatility and technical support levels.
Profit Targets (Based on Conservative)
+5%
$112.02
+10%
$106.12
+15%
$100.23
Calculate Your Trade
⚠️
Disclaimer
This comparison involves assets with varying risk profiles. The content is for educational purposes only. Comparison includes a higher-volatility asset (ANET). Correlations between assets with different volatility profiles can break down rapidly during market stress. Liquidity risks may prevent execution at displayed prices. Note: The AI favored ANET based on growth trajectory. This is valid for the specified timeframe only. While CSCO currently shows the stronger short-term technical score (55 vs 25), the AI favors ANET on the factors above rather than today's technical setup.