Comparing NEC (NIPNF) and Arista Networks (ANET)

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

Insider and Institutional Ownership

60.4% of Arista Networks shares are owned by institutional investors. 25.0% of Arista Networks shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares NEC and Arista Networks’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NEC $25.69 billion 0.30 $412.83 million N/A N/A
Arista Networks $1.65 billion 10.50 $423.20 million $4.65 49.29

Arista Networks has lower revenue, but higher earnings than NEC.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NEC 0 0 0 0 N/A
Arista Networks 2 7 19 0 2.61

Arista Networks has a consensus price target of $289.50, suggesting a potential upside of 26.32%. Given Arista Networks’ higher possible upside, analysts plainly believe Arista Networks is more favorable than NEC.

Profitability

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

Net Margins Return on Equity Return on Assets
NEC 1.26% 3.50% 1.33%
Arista Networks 28.05% 29.06% 19.53%

Summary

Arista Networks beats NEC on 9 of the 10 factors compared between the two stocks.

About NEC

NEC Corporation engages in the integration of information technology (IT) and network technologies worldwide. It operates in four segments: Public, Enterprise, Telecom Carrier, and System Platform. The company provides systems integration services, such as systems implementation and consulting; maintenance and support services; outsourcing/cloud services; and system equipment. It also provides network infrastructure products, including core network products, mobile phone base stations, submarine systems comprising submarine cable and ocean observation systems, optical transmission systems, routers/switches, and mobile backhaul products, as well as telecom operations and management solutions, and other services/solutions. In addition, the company provides hardware products, such as servers, mainframes, supercomputers, storage products, business PCs, tablet devices, POS, ATMs, control equipment, wireless LAN routers, displays, and projectors; and software products that consist of integrated operation management, application servers, and security and database software. Further, it offers enterprise network solutions that include IP telephony systems, WAN/wireless access equipment, and LAN products; data center infrastructure services; and safety products, which include biometric solutions comprising face recognition and fingerprint identification, surveillance products, Smart energy products, and lighting equipment. Additionally, the company engages in the provision of IT services for retail sector; and manufacturing co-creation program activities. It primarily serves governments, governmental agencies, local governments, public institutions, financial institutions, and other organizations, as well as telecom carriers. The company was formerly known as Nippon Electric Company, Limited and changed its name to NEC Corporation in April 1983. NEC Corporation was founded in 1899 and is headquartered in Tokyo, Japan.

About Arista Networks

Arista Networks, Inc. provides cloud networking solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. The company's cloud networking solutions consist of its 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. 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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