Ericsson (NASDAQ:ERIC) vs. Arista Networks (NYSE:ANET) Financial Survey

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

Insider and Institutional Ownership

8.0% of Ericsson shares are owned by institutional investors. Comparatively, 82.5% of Arista Networks shares are owned by institutional investors. 2.7% of Arista Networks shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Earnings & Valuation

This table compares Ericsson and Arista Networks”s gross revenue, earnings per share and valuation.

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

Risk & Volatility

Ericsson has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Arista Networks has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Ericsson and Arista Networks, as provided by MarketBeat.

Ericsson currently has a consensus price target of $9.00, suggesting a potential downside of 3.12%. Arista Networks has a consensus price target of $231.70, suggesting a potential upside of 11.66%. Given Arista Networks’ stronger consensus rating and higher probable upside, analysts plainly believe Arista Networks is more favorable than Ericsson.

Summary

Arista Networks beats Ericsson on 14 of the 15 factors compared between the two stocks.

About Ericsson

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Telefonaktiebolaget LM Ericsson (publ), together with its subsidiaries, provides mobile connectivity solutions for telcom operators and enterprise customers in various sectors in North America, Europe, Latin America, the Middle East, Africa, North East Asia, South East Asia, Oceania, and India. It operates in four segments: Networks; Cloud Software and Services; Enterprise; and Other. The Networks segment offers radio access network (RAN) solutions for various network spectrum bands, including purpose-built and open RAN-prepared hardware and software. This segment also provides cloud RAN; transport solutions; passive and active antennas; and a range of service portfolios covering network deployment and support. The Cloud Software and Services segment offers core networks, business and operational support systems, network design and optimization, and managed network services. The Enterprise segment offers a global communications platform, including cloud-based unified communications as a service, contact center as a service, and communications platform as a service; enterprise wireless solutions comprising private wireless networks and wireless wan pre-packaged solutions; and technologies and new business solutions, such as mobile financial services, security solutions, and advertising services. The Other segment includes Redbee media that prepares and distributes live and video services for broadcasters, sports leagues, and communications service providers. It offers its services through wholesalers and distributors. The company was formerly known as Allmanna Telefon AB LM Ericsson and changed its name to Telefonaktiebolaget LM Ericsson (publ) in January 1926. Telefonaktiebolaget LM Ericsson (publ) was founded in 1876 and is headquartered in Stockholm, Sweden.

About Arista Networks

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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.