Arista’s Analyst Day Reaffirms Successful Strategy and We Maintain Our $130 FVE

We maintain our $130 fair value estimate for wide-moat Arista Networks after its 2022 analyst day. In our view, Arista’s plans laid out a continuation of its existing strategy that has carved it a wide economic moat, headlined by its highly differentiated software. We liked hearing about plans to enter new adjacent markets like wide-area networking, but will only get concrete details next year. Arista’s new medium-term financial targets largely aligned with our existing forecast, but for stronger short-term sales and weaker short-term profitability that offset our valuation. We continue to see Arista as the technology leader in high-speed networking, and are happy with the firm’s evolving, but consistent software-led strategy. Shares rose 6% afterhours on strong financial targets and now sit right at our fair value estimate.