Reviewing Arista Networks (ANET) and Digi International (DGII)
Arista Networks (NYSE: ANET) and Digi International (NASDAQ:DGII) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, dividends and valuation.
This table compares Arista Networks and Digi International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
58.2% of Arista Networks shares are held by institutional investors. Comparatively, 76.4% of Digi International shares are held by institutional investors. 28.1% of Arista Networks shares are held by insiders. Comparatively, 6.8% of Digi International shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This is a breakdown of recent ratings and target prices for Arista Networks and Digi International, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Arista Networks presently has a consensus price target of $228.07, suggesting a potential downside of 22.05%. Digi International has a consensus price target of $14.50, suggesting a potential upside of 42.86%. Given Digi International’s stronger consensus rating and higher possible upside, analysts clearly believe Digi International is more favorable than Arista Networks.
Risk & Volatility
Arista Networks has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500. Comparatively, Digi International has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500.
Earnings and Valuation
This table compares Arista Networks and Digi International’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Arista Networks||$1.13 billion||18.94||$184.18 million||$4.84||60.45|
|Digi International||$181.63 million||1.51||$9.36 million||$0.09||112.79|
Arista Networks has higher revenue and earnings than Digi International. Arista Networks is trading at a lower price-to-earnings ratio than Digi International, indicating that it is currently the more affordable of the two stocks.
Arista Networks beats Digi International on 9 of the 14 factors compared between the two stocks.
About Arista Networks
Arista Networks, Inc. is a supplier of cloud networking solutions that use software innovations to address the needs of Internet companies, cloud service providers and data centers for enterprise support. It develops, markets and sells cloud networking solutions, which consist of its Gigabit Ethernet switches and related software. The Company’s cloud networking solutions consist of its Extensible Operating System (EOS), a set of network applications and its Ethernet switching and routing platforms. The programmability of EOS has allowed it to create a set of software applications that address the requirements of cloud networking, including workflow automation, network visibility and analytics, and has also allowed it to integrate with a range of third-party applications for virtualization, management, automation, orchestration and network services. EOS supports cloud and virtualization solutions, including VMware NSX, Microsoft System Center and other cloud management frameworks.
About Digi International
Digi International Inc. is a provider of mission and business-critical machine-to-machine (M2M) and Internet-of-Things (IoT) connectivity products and services. The Company creates connected products and deploys and manages critical communications infrastructures in a range of environments. It offers four categories of hardware products: cellular routers and gateways, radio frequency (RF), embedded and network products. The Company’s cellular product category includes its cellular routers and all gateways. The Company’s RF product category includes its XBee modules, as well as other RF Solutions. Its embedded product category includes Digi Connect and Rabbit embedded systems on module and single board computers. Its network product category includes console and serial servers and universal serial bus (USB) connected products. The Company’s service offerings include wireless design services, Digi Device Cloud (which includes Digi Remote Manager) and enterprise support services.
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