Critical Contrast: Arista Networks (NYSE:ANET) versus China Crescent Enterprises (OTCMKTS:CCTR)


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

Profitability

This table compares China Crescent Enterprises and Arista Networks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
China Crescent Enterprises N/A N/A N/A
Arista Networks 32.06% 20.37% 14.19%

Risk and Volatility

China Crescent Enterprises has a beta of 3.53, suggesting that its stock price is 253% more volatile than the S&P 500. Comparatively, Arista Networks has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500.

Valuation and Earnings

This table compares China Crescent Enterprises and Arista Networks’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
China Crescent Enterprises N/A N/A N/A N/A N/A
Arista Networks $2.41 billion 9.72 $859.87 million $8.69 35.63

Arista Networks has higher revenue and earnings than China Crescent Enterprises.

Insider and Institutional Ownership

61.8% of Arista Networks shares are owned by institutional investors. 23.8% of Arista Networks shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for China Crescent Enterprises and Arista Networks, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Crescent Enterprises 0 0 0 0 N/A
Arista Networks 0 9 13 0 2.59

Arista Networks has a consensus price target of $263.48, indicating a potential downside of 14.91%. Given Arista Networks’ higher possible upside, analysts clearly believe Arista Networks is more favorable than China Crescent Enterprises.

Summary

Arista Networks beats China Crescent Enterprises on 8 of the 9 factors compared between the two stocks.

China Crescent Enterprises Company Profile

China Crescent Enterprises, Inc., through its subsidiaries, provides information technology products and services, and systems integration services in the People's Republic of China. It offers consulting, development, implementation, and maintenance services for technology systems, which include software and hardware peripherals for computing, communication, and data exchanges related to general business application, as well as specialty fields of medical, security, military, and homeland defense applications. The company also involves in the prototype development of security systems and original equipment manufacturer sourcing for the production of hardware. In addition, it engages in the resale of IT products, including notebook and desktop computers, printers, servers, network equipment, as well as operating systems, database, middleware, and application software. Further, the company manufactures wireless communication terminals, including GSM, GSM/GPRS modules, GPS modules, GPS trackers, and personal navigation devices. It has a strategic partnership with Gaozhi Science and Technology Development, LTD. to develop and distribute high technology products and services. The company was formerly known as NewMarket China, Inc. and changed its name to China Crescent Enterprises, Inc. in June 2008. China Crescent Enterprises, Inc. is headquartered in Dallas, Texas. China Crescent Enterprises, Inc. is a subsidiary of NewMarket Technology, Inc.

Arista Networks Company Profile

Arista Networks, Inc. develops, markets, and sells cloud networking solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. The company's cloud networking solutions consist of 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. Arista Networks, Inc. has a strategic partnership with Forescout Technologies, Inc. to reduce cybersecurity risks brought on by growth of IoT devices, network complexity, and propagation of malware. 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.

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