Arista Networks (NYSE:ANET) vs. Ciena (NYSE:CIEN) Head-To-Head Review

Ciena (NYSE:CIEN) and Arista Networks (NYSE:ANET) are both large-cap technology companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Institutional & Insider Ownership

92.0% of Ciena shares are owned by institutional investors. Comparatively, 82.5% of Arista Networks shares are owned by institutional investors. 0.6% of Ciena shares are owned by company insiders. Comparatively, 2.7% of Arista Networks shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Ciena has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500. Comparatively, Arista Networks has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Ciena and Arista Networks, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ciena	0	6	15	1	2.77
Arista Networks	0	1	21	2	3.04

Ciena presently has a consensus price target of $485.93, suggesting a potential upside of 49.30%. Arista Networks has a consensus price target of $233.20, suggesting a potential upside of 33.80%. Given Ciena’s higher possible upside, research analysts clearly believe Ciena is more favorable than Arista Networks.

Valuation & Earnings

This table compares Ciena and Arista Networks”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ciena	$4.77 billion	9.68	$123.34 million	$4.48	72.65
Arista Networks	$9.01 billion	24.41	$3.51 billion	$3.17	54.98

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ciena	10.87%	25.33%	11.27%
Arista Networks	38.37%	30.65%	19.44%

Summary

Arista Networks beats Ciena on 11 of the 15 factors compared between the two stocks.

About Ciena

Ciena Corporation provides hardware and software services for delivery of video, data, and voice traffic metro, aggregation, and access communications network worldwide. The company’s Networking Platforms segment offers convergence of coherent optical transport, open optical networking, optical transport network switching, IP routing, and switching services. Its products include 6500 Packet-Optical Platform, Waveserver stackable interconnect system, and the 6500 Reconfigurable line system, and the 5400 family of Packet-Optical platforms, as well as 8100 coherent routing platforms; 3000 family of service delivery switches and the 5000 family of service aggregation switches, as well as 8700 Packetwave Platform and 6500 Packet Transport System. This segment also sells operating system software and enhanced software features embedded in each of its products. The company’s Blue Planet Automation Software and Services segment provides multi-domain service orchestration, inventory, route optimization and analysis, multi-cloud orchestration, and unified assurance and analytics services. Its Platform Software and Service segment offers MCP domain controller solution, and OneControl unified management system, as well as planning tools. The company’s Global Services segment provides maintenance support and training, installation and deployment, and consulting and network design services. Ciena Corporation was incorporated in 1992 and is headquartered in Hanover, Maryland.

About Arista Networks

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.