Critical Comparison: Arista Networks (NYSE:ANET) and F5 (NASDAQ:FFIV)

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

Risk and Volatility

F5 has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500. Comparatively, Arista Networks has a beta of 1.6, suggesting that its stock price is 60% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for F5 and Arista Networks, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
F5	1	7	4	0	2.25
Arista Networks	0	1	21	2	3.04

F5 currently has a consensus price target of $443.00, indicating a potential upside of 36.50%. Arista Networks has a consensus price target of $232.95, indicating a potential upside of 42.09%. Given Arista Networks’ stronger consensus rating and higher probable upside, analysts clearly believe Arista Networks is more favorable than F5.

Institutional & Insider Ownership

90.7% of F5 shares are held by institutional investors. Comparatively, 82.5% of Arista Networks shares are held by institutional investors. 0.5% of F5 shares are held by insiders. Comparatively, 2.7% of Arista Networks shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
F5	21.14%	21.00%	11.85%
Arista Networks	38.37%	30.65%	19.44%

Valuation and Earnings

This table compares F5 and Arista Networks”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
F5	$3.42 billion	5.38	$722.15 million	$12.53	25.90
Arista Networks	$10.54 billion	19.62	$3.51 billion	$3.17	51.72

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

Summary

Arista Networks beats F5 on 13 of the 15 factors compared between the two stocks.

About F5

F5, Inc. provides multi-cloud application security and delivery solutions in the United States, Europe, the Middle East, Africa, and the Asia Pacific region. The company’s distributed cloud services enable its customers to deploy, secure, and operate applications in any architecture, from on-premises to the public cloud. It offers unified, security, networking, and application management solutions, such as web app and API protection; multi-cloud networking; application delivery and deployment; domain name system; content delivery network; and application deployment and orchestration. The company also provides application security and delivery products, including NGINX Plus; NGINX Management Suite; NGINX Ingress Controller; NGINX App Protect; BIG-IP Packaged Software; and BIG-IP Systems. In addition, it provides a range of professional services, including maintenance, consulting, training, and other technical support services. F5, Inc. sells its products to large enterprise businesses, public sector institutions, governments, and service providers through distributors, value-added resellers, managed service providers, systems integrators, and other indirect channel partners. It has partnerships with public cloud providers, such as Amazon Web Services, Microsoft Azure, and Google Cloud Platform. The company was formerly known as F5 Networks, Inc. and changed its name to F5, Inc. in November 2021. F5, Inc. was incorporated in 1996 and is headquartered in Seattle, Washington.

About Arista Networks

Arista Networks, Inc. engages in the development, marketing, and sale of data-driven, client to cloud networking solutions for data center, campus, and routing environments in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. Its cloud networking solutions consist of Extensible Operating System (EOS), a publish-subscribe state-sharing networking operating system offered in combination with a set of network applications. The company offers data center and cloud networking systems, including newer artificial intelligence (AI) ethernet switching platforms; campus wired and wireless products, and routing systems addressing Core Routing, Edge Routing, Data Center Interconnect (DCI), Multi-cloud and Wide Area Networking (WAN) use cases; and a suite of value-add software solutions that leverage EOS to provide end-to-end orchestration, automation, analytics, network monitoring, and security. It also provides post contract customer support services, such as technical support, hardware repair and replacement parts beyond standard warranty, bug fixes, patches, and upgrade services. The company serves a range of industries comprising internet companies, service providers, financial services organizations, government agencies, media and entertainment companies, telecommunication service providers, and others. It markets and sells its products through distributors, system integrators, value-added resellers, 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 incorporated in 2004 and is headquartered in Santa Clara, California.