Arista Networks Net Income vs. Return On Equity
| 117 Stock | EUR 100.88 0.04 0.04% |
For Arista Networks profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Arista Networks to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Arista Networks utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Arista Networks's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Arista Networks over time as well as its relative position and ranking within its peers.
Arista |
Arista Networks Return On Equity vs. Net Income Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Arista Networks's current stock value. Our valuation model uses many indicators to compare Arista Networks value to that of its competitors to determine the firm's financial worth. Arista Networks is number one stock in net income category among its peers. It also is number one stock in return on equity category among its peers . The ratio of Net Income to Return On Equity for Arista Networks is about 4,432,795,805 . The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Arista Networks' earnings, one of the primary drivers of an investment's value.Arista Return On Equity vs. Net Income
Net income is the profit of a company for the reporting period, which is derived after taking revenues and gains and subtracting all expenses and losses. Net income is one of the most-watched numbers by money managers as well as individual investors.
Arista Networks |
| = | 1.35 B |
Because income is reported on the Income Statement of a company and is measured in dollars some investors prefer to use Profit Margin, which measures income as a percentage of sales.
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
Arista Networks |
| = | 0.31 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Arista Return On Equity Comparison
Arista Networks is currently under evaluation in return on equity category among its peers.
Arista Networks Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Arista Networks, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Arista Networks will eventually generate negative long term returns. The profitability progress is the general direction of Arista Networks' change in net profit over the period of time. It can combine multiple indicators of Arista Networks, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Arista Networks, Inc. develops, markets, and sells cloud networking solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. Arista Networks, Inc. was founded in 2004 and is headquartered in Santa Clara, California. ARISTA NETWORKS operates under Computer Systems classification in Germany and is traded on Frankfurt Stock Exchange. It employs 2300 people.
Arista Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Arista Networks. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Arista Networks position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Arista Networks' important profitability drivers and their relationship over time.
Use Arista Networks in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Arista Networks position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Arista Networks will appreciate offsetting losses from the drop in the long position's value.Arista Networks Pair Trading
Arista Networks Pair Trading Analysis
The ability to find closely correlated positions to Arista Networks could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Arista Networks when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Arista Networks - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Arista Networks to buy it.
The correlation of Arista Networks is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Arista Networks moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Arista Networks moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Arista Networks can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Arista Networks position
In addition to having Arista Networks in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
Run Computers Thematic Idea Now
Computers
Companies that manufacture and distribute personal and business computers. The Computers theme has 44 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Computers Theme or any other thematic opportunities.
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Additional Information and Resources on Investing in Arista Stock
When determining whether Arista Networks is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if Arista Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Arista Networks Stock. Highlighted below are key reports to facilitate an investment decision about Arista Networks Stock:Check out Trending Equities. For more detail on how to invest in Arista Stock please use our How to Invest in Arista Networks guide.You can also try the My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
To fully project Arista Networks' future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Arista Networks at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Arista Networks' income statement, its balance sheet, and the statement of cash flows.