In today’s fast-evolving technology landscape, Arista Networks, Inc. and Pure Storage, Inc. stand out as key players in the computer hardware industry. Both companies focus on innovative networking and data storage solutions, serving overlapping markets with cloud and enterprise clients. Their commitment to cutting-edge technology makes them compelling candidates for investment. Join me as we analyze which of these two tech leaders offers the most promising opportunity for your portfolio.
Table of contents
Companies Overview
I will begin the comparison between Arista Networks, Inc. and Pure Storage, Inc. by providing an overview of these two companies and their main differences.
Arista Networks Overview
Arista Networks, Inc. develops, markets, and sells cloud networking solutions globally, including extensible operating systems and Ethernet switching platforms. Its products serve diverse sectors such as internet companies, financial services, and government agencies. Headquartered in Santa Clara, California, Arista operates through distributors, system integrators, and a direct sales force, positioning itself as a key player in the cloud networking hardware industry.
Pure Storage Overview
Pure Storage, Inc. specializes in data storage technologies and software, offering enterprise-class data services like data reduction and encryption. Its product lineup includes FlashArray, FlashBlade, and AI-ready infrastructure solutions. Based in Mountain View, California, Pure Storage markets its products and subscription services through direct sales and channel partners, focusing on modern all-flash storage and cloud-native data management solutions.
Key similarities and differences
Both companies operate in the computer hardware industry and serve enterprise customers with advanced technology solutions. Arista Networks focuses on cloud networking and Ethernet switching, while Pure Storage emphasizes data storage products and services, including AI-ready infrastructure. Both utilize direct sales and partner channels, but their core product offerings and market focuses differ significantly within the technology sector.
Income Statement Comparison
The table below presents the latest full fiscal year income statement figures for Arista Networks, Inc. and Pure Storage, Inc., highlighting key financial metrics for 2024 and 2025 respectively.
| Metric | Arista Networks, Inc. (ANET) | Pure Storage, Inc. (PSTG) |
|---|---|---|
| Market Cap | 164B | 24.7B |
| Revenue | 7.00B (2024) | 3.17B (2025) |
| EBITDA | 3.01B (2024) | 282M (2025) |
| EBIT | 2.94B (2024) | 156M (2025) |
| Net Income | 2.85B (2024) | 107M (2025) |
| EPS | 2.27 (2024) | 0.33 (2025) |
| Fiscal Year | 2024 | 2025 |
Income Statement Interpretations
Arista Networks, Inc.
Arista Networks has shown strong growth from 2020 to 2024, with revenue increasing from $2.3B to $7B and net income rising from $635M to $2.85B. Margins improved significantly, with a gross margin of 64.13% and net margin of 40.73% in 2024. The latest year saw a 19.5% revenue growth and a 14.34% net margin expansion, indicating robust profitability gains.
Pure Storage, Inc.
Pure Storage’s revenue increased from $1.68B in 2021 to $3.17B in 2025, with net income turning positive and reaching $107M in 2025 from a loss in earlier years. The gross margin remained healthy at 69.84%, though EBIT and net margins are lower at 4.91% and 3.37%. The most recent year shows solid growth: 11.92% in revenue and a 55.55% jump in net margin, reflecting improving operational efficiency.
Which one has the stronger fundamentals?
Arista Networks exhibits stronger fundamentals with higher and consistently favorable margins, rapid revenue and net income growth, and excellent profitability metrics. Pure Storage shows improvement and positive trends but maintains lower operating and net margins with a more modest scale. Arista’s financials suggest greater stability and profitability over the analyzed periods.
Financial Ratios Comparison
The table below presents the most recent financial ratios for Arista Networks, Inc. (ANET) and Pure Storage, Inc. (PSTG) for the fiscal year 2024 and 2025 respectively, providing a clear basis for comparison.
| Ratios | Arista Networks, Inc. (ANET) 2024 | Pure Storage, Inc. (PSTG) 2025 |
|---|---|---|
| ROE | 28.5% | 8.2% |
| ROIC | 22.7% | 2.5% |
| P/E | 48.7 | 206.9 |
| P/B | 13.9 | 16.9 |
| Current Ratio | 4.36 | 1.61 |
| Quick Ratio | 3.69 | 1.58 |
| D/E | 0 | 0.22 |
| Debt-to-Assets | 0 | 7.1% |
| Interest Coverage | 0 | 10.9 |
| Asset Turnover | 0.50 | 0.80 |
| Fixed Asset Turnover | 70.8 | 5.21 |
| Payout ratio | 0 | 0 |
| Dividend yield | 0 | 0 |
Interpretation of the Ratios
Arista Networks, Inc.
Arista Networks shows predominantly favorable profitability ratios, with a strong net margin of 40.73% and robust returns on equity (28.54%) and invested capital (22.74%). However, valuation metrics such as a high PE of 48.69 and PB of 13.89 appear stretched, and the current ratio at 4.36 may indicate inefficient asset use. The company does not pay dividends, likely prioritizing growth or reinvestment strategies.
Pure Storage, Inc.
Pure Storage presents weaker profitability with a net margin of 3.37% and lower returns on equity (8.17%) and invested capital (2.45%), reflecting operational challenges. Valuation ratios like a PE of 206.9 and PB of 16.9 are high, suggesting market optimism despite modest earnings. The company also does not pay dividends, consistent with reinvestment in R&D and growth initiatives.
Which one has the best ratios?
Arista Networks holds the advantage with a majority of favorable ratios, especially on profitability and capital efficiency, despite some valuation and liquidity concerns. Pure Storage demonstrates a more mixed profile with neutral liquidity but weaker profitability and higher valuation multiples, resulting in an overall neutral ratio evaluation.
Strategic Positioning
This section compares the strategic positioning of Arista Networks, Inc. and Pure Storage, Inc. regarding market position, key segments, and exposure to technological disruption:
Arista Networks, Inc.
- Leading cloud networking provider with strong competitive presence in multiple global regions.
- Key segments include cloud networking products and services targeting internet, financial, government, and media sectors.
- Exposure to disruption through extensible OS and network applications but reliant on hardware switching and routing platforms.
Pure Storage, Inc.
- Data storage tech provider with a smaller market cap facing moderate competitive pressure.
- Focuses on enterprise-class data storage products and subscription services, including AI-ready infrastructure.
- Faces disruption risks from evolving storage technologies and cloud-native Kubernetes data management solutions.
Arista Networks, Inc. vs Pure Storage, Inc. Positioning
Arista shows a diversified approach across cloud networking hardware and services targeting various industries, while Pure Storage concentrates on advanced data storage technologies and cloud solutions. Arista’s broader market reach contrasts with Pure’s specialized product focus, each with distinct growth drivers.
Which has the best competitive advantage?
Arista Networks exhibits a very favorable moat with consistent value creation and growing ROIC, indicating durable competitive advantage. Pure Storage currently sheds value despite improving profitability, suggesting a less robust competitive position.
Stock Comparison
The stock price movements of Arista Networks, Inc. and Pure Storage, Inc. over the past 12 months reveal strong overall gains with recent downward corrections, highlighting shifting trading dynamics and decelerating bullish momentum.
Trend Analysis
Arista Networks, Inc. (ANET) exhibited a bullish trend over the past year with a 94.16% price increase, although momentum decelerated. The stock reached a high of 157.69 and a low of 61.52, with significant volatility (24.64 std deviation). Recent months show a 17.6% decline.
Pure Storage, Inc. (PSTG) also showed a bullish trend with an 85.88% gain over 12 months, accompanied by decelerating acceleration. Its price ranged from 37.18 to 98.7 with moderate volatility (12.83 std deviation). The recent trend dropped 23.6%.
Comparing the two, ANET delivered higher overall market performance with a stronger total price increase, despite both stocks experiencing recent downward trends and declining buyer dominance.
Target Prices
The current analyst consensus indicates moderate upside potential for both Arista Networks, Inc. and Pure Storage, Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Arista Networks, Inc. | 183 | 150 | 163 |
| Pure Storage, Inc. | 105 | 60 | 91.15 |
Analysts expect Arista Networks to trade significantly above its current price of $129.93, while Pure Storage shows upside from $75.41, indicating positive sentiment but with wider target ranges.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Arista Networks, Inc. and Pure Storage, Inc.:
Rating Comparison
Arista Networks, Inc. Rating
- Rating: B, considered very favorable overall.
- Discounted Cash Flow Score: 3, indicating a moderate valuation.
- ROE Score: 5, showing very favorable efficiency in equity use.
- ROA Score: 5, very favorable asset utilization.
- Debt To Equity Score: 1, very unfavorable financial risk.
- Overall Score: 3, moderate financial standing.
Pure Storage, Inc. Rating
- Rating: B-, also considered very favorable overall.
- Discounted Cash Flow Score: 3, indicating a moderate valuation.
- ROE Score: 3, moderate efficiency in equity use.
- ROA Score: 3, moderate asset utilization.
- Debt To Equity Score: 3, moderate financial risk.
- Overall Score: 2, moderate financial standing.
Which one is the best rated?
Based on the provided data, Arista Networks has a higher overall score and stronger return on equity and assets but weaker debt management compared to Pure Storage. Arista Networks is therefore better rated overall.
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for Arista Networks, Inc. and Pure Storage, Inc.:
Arista Networks, Inc. Scores
- Altman Z-Score of 18.45 indicates a strong safe zone.
- Piotroski Score of 5 reflects average financial strength.
Pure Storage, Inc. Scores
- Altman Z-Score of 5.91 also places the company in safe zone.
- Piotroski Score of 5 reflects average financial strength.
Which company has the best scores?
Both companies are well within the safe zone for bankruptcy risk with Altman Z-Scores above 3. Both have identical Piotroski Scores of 5, indicating average financial health. Arista Networks shows a notably higher Altman Z-Score.
Grades Comparison
The grades assigned by reputable financial institutions for Arista Networks, Inc. and Pure Storage, Inc. are as follows:
Arista Networks, Inc. Grades
The following table summarizes recent grades from recognized grading companies for Arista Networks, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Piper Sandler | Upgrade | Overweight | 2026-01-05 |
| Morgan Stanley | Maintain | Overweight | 2025-12-17 |
| Piper Sandler | Maintain | Neutral | 2025-11-05 |
| Barclays | Maintain | Overweight | 2025-11-05 |
| Rosenblatt | Maintain | Neutral | 2025-11-05 |
| Morgan Stanley | Maintain | Overweight | 2025-10-10 |
| Needham | Maintain | Buy | 2025-09-16 |
| Wells Fargo | Maintain | Overweight | 2025-09-12 |
| JP Morgan | Maintain | Overweight | 2025-09-12 |
| Goldman Sachs | Maintain | Buy | 2025-09-12 |
Overall, Arista Networks shows a strong and consistent trend toward “Buy” and “Overweight” ratings, with recent upgrades indicating positive analyst sentiment.
Pure Storage, Inc. Grades
The following table presents recent grades from recognized grading companies for Pure Storage, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| UBS | Maintain | Sell | 2025-12-03 |
| Barclays | Maintain | Equal Weight | 2025-12-03 |
| Needham | Maintain | Buy | 2025-12-03 |
| Susquehanna | Downgrade | Neutral | 2025-12-03 |
| JP Morgan | Maintain | Overweight | 2025-12-03 |
| Citigroup | Maintain | Buy | 2025-12-03 |
| Wedbush | Maintain | Outperform | 2025-12-03 |
| Lake Street | Maintain | Buy | 2025-12-03 |
| JP Morgan | Maintain | Overweight | 2025-11-17 |
| Morgan Stanley | Maintain | Equal Weight | 2025-11-17 |
Pure Storage’s grades range broadly from “Sell” to “Outperform,” indicating a more mixed analyst outlook with some cautious and some positive views.
Which company has the best grades?
Arista Networks, Inc. has received more consistently positive grades, mainly clustered around “Buy” and “Overweight,” whereas Pure Storage, Inc. shows a wider spread, including a “Sell” and several neutral ratings. This suggests that Arista’s outlook is generally more favored by analysts, which might influence investor confidence and portfolio decisions accordingly.
Strengths and Weaknesses
Below is a comparative overview of key strengths and weaknesses of Arista Networks, Inc. (ANET) and Pure Storage, Inc. (PSTG) based on the most recent financial and operational data.
| Criterion | Arista Networks, Inc. (ANET) | Pure Storage, Inc. (PSTG) |
|---|---|---|
| Diversification | Moderate: Primarily networking products with growing service revenue (5.9B total in 2024) | Moderate: Balanced product and service revenue streams (3.17B total in 2025) |
| Profitability | High profitability: 40.7% net margin, ROIC 22.7%, strong value creation (ROIC > WACC by 12.3%) | Low profitability: 3.4% net margin, ROIC 2.5%, value destruction (ROIC < WACC by 7.2%) |
| Innovation | Strong innovation evidenced by high fixed asset turnover and growing ROIC trend (+50%) | Improving innovation with growing ROIC trend (+119%), but still shedding value overall |
| Global presence | Well-established global player with durable competitive advantage | Global presence but less established moat, profitability challenges persist |
| Market Share | Leading position in high-performance networking | Growing presence in storage solutions, but competitive pressure remains high |
Key takeaway: Arista Networks demonstrates a durable competitive advantage with robust profitability and efficient capital use, making it a stronger value creator. Pure Storage shows improving profitability trends but still struggles with value destruction and lower margins, indicating higher investment risk.
Risk Analysis
Below is a comparative table of key risks for Arista Networks, Inc. (ANET) and Pure Storage, Inc. (PSTG) based on the most recent data from 2025-2026.
| Metric | Arista Networks, Inc. (ANET) | Pure Storage, Inc. (PSTG) |
|---|---|---|
| Market Risk | High beta (1.414) indicates elevated volatility and sensitivity to market swings. | Moderate beta (1.264) suggests slightly less volatility than ANET. |
| Debt level | No debt (0 D/E ratio), very low financial risk. | Low debt (D/E 0.22), manageable but some leverage present. |
| Regulatory Risk | Moderate, due to global operations and tech industry regulations. | Moderate, with exposure to data privacy and storage regulations internationally. |
| Operational Risk | Dependent on innovation and supply chain in cloud networking hardware. | Risk from rapid technology changes in data storage and subscription service models. |
| Environmental Risk | Low to moderate; tech hardware manufacturing has environmental impacts but mitigated by company policies. | Moderate; data centers and hardware production contribute to environmental footprint. |
| Geopolitical Risk | Exposure to global markets including Asia-Pacific, potential trade tensions impact. | Global exposure with similar geopolitical uncertainties, especially in Asia and Europe. |
In synthesis, Arista Networks carries higher market volatility risk but benefits from zero debt, reducing financial distress risk. Pure Storage faces moderate leverage and pricing risk, reflected in its high P/E ratio, increasing vulnerability to market corrections. Both are exposed to regulatory and geopolitical risks due to their international presence, but operational risks tied to technology innovation pace and supply chain remain the most impactful. Investors should weigh these factors carefully, prioritizing risk management based on their portfolio tolerance.
Which Stock to Choose?
Arista Networks, Inc. (ANET) shows strong income growth with a 2024 net margin of 40.73% and favorable profitability metrics. Its financial ratios are mostly positive, featuring a low debt level and a very favorable credit rating (B). The company maintains a very favorable moat with ROIC well above WACC.
Pure Storage, Inc. (PSTG) exhibits moderate income growth with a 2025 net margin of 3.37%, alongside mixed financial ratios. Despite manageable debt and a favorable credit rating (B-), its ROIC remains below WACC, indicating a slightly unfavorable moat, though profitability is improving.
Investors seeking companies with strong profitability and durable competitive advantages might find ANET more appealing, whereas those open to moderate financial stability and improving profitability could consider PSTG. The choice could depend on the investor’s risk tolerance and focus on growth or stability.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Arista Networks, Inc. and Pure Storage, Inc. to enhance your investment decisions:
