Head to Head Survey: Arista Networks (ANET) vs. Silicom (SILC)

Arista Networks (NYSE: ANET) and Silicom (NASDAQ:SILC) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Insider & Institutional Ownership

53.3% of Arista Networks shares are held by institutional investors. Comparatively, 33.3% of Silicom shares are held by institutional investors. 25.0% of Arista Networks shares are held by insiders. Comparatively, 25.4% of Silicom shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations and price targets for Arista Networks and Silicom, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arista Networks 1 14 18 0 2.52
Silicom 0 0 1 0 3.00

Arista Networks currently has a consensus price target of $259.59, suggesting a potential upside of 1.50%. Silicom has a consensus price target of $50.00, suggesting a potential upside of 25.44%. Given Silicom’s stronger consensus rating and higher possible upside, analysts plainly believe Silicom is more favorable than Arista Networks.

Risk & Volatility

Arista Networks has a beta of 1.5, indicating that its stock price is 50% more volatile than the S&P 500. Comparatively, Silicom has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500.

Valuation & Earnings

This table compares Arista Networks and Silicom’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Arista Networks $1.65 billion 11.56 $423.20 million $4.65 55.00
Silicom $125.69 million 2.39 $21.71 million N/A N/A

Arista Networks has higher revenue and earnings than Silicom.

Profitability

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

Net Margins Return on Equity Return on Assets
Arista Networks 27.19% 27.23% 18.31%
Silicom 13.61% 13.28% 10.95%

Summary

Arista Networks beats Silicom on 10 of the 13 factors compared between the two stocks.

Arista Networks Company Profile

Arista Networks, Inc. provides cloud networking solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. The company's cloud networking solutions consist of its extensible operating systems, a set of network applications, as well as gigabit Ethernet switching and routing platforms, including universal leaf, spline, and universal spine products. It also provides post contract customer support services, such as technical support, hardware repair and parts replacement beyond standard warranty, bug fix, patch, and upgrade services. The company serves a range of industries comprising Internet companies, service providers, financial services organizations, government agencies, media and entertainment companies, and others. It markets and sells its products through distributors, value-added resellers, system integrators, 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 founded in 2004 and is headquartered in Santa Clara, California.

Silicom Company Profile

Silicom Ltd., together with its subsidiaries, designs, manufactures, markets, and supports networking and data infrastructure solutions for a range of servers, server based systems, and communications devices in North America, Europe, and the Asia Pacific. It offers server networking interface cards with and without bypass for the server networking industry. The company also provides intelligent and programmable cards, including redirector cards; encryption and data compression hardware acceleration cards; time stamping and full field programmable gate array (FPGA) based network capture and mobile OSS distribution solutions; network processor acceleration cards; FPGA based ultra-low latency solutions; and compute blades, which offer general compute capability in networking intensive environment. In addition, it offers bypass switches and intelligent bypass switches; server to appliance converter products that enable standard servers to be configured as network appliances with front networking ports; and CPE/edge/low end appliance units. The company sells its products to original equipment manufacturers. Silicom Ltd. was founded in 1987 and is headquartered in Kfar Sava, Israel.

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