Arista’s High-Speed Proficiency Is Worthy of a Wide Moat, and Shares Are at a Bargain

We raise our fair value estimate for Arista Networks to $130 per share from $115 previously and upgrade the firm’s economic moat rating to wide from narrow. We view shares as undervalued, as we are more optimistic about Arista’s ability to continue taking share across both the cloud and the enterprise and fend off competition both from Cisco and ambitious new entrants. We modestly raise our short- and long-term forecasts for sales growth via share gains. In addition, we maintain our positive moat trend rating, Exemplary capital allocation rating, and High Uncertainty Rating.