Arista Networks: A High-Quality Company with Reasonable Growth but Overvalued

Arista Networks has excellent capital allocation, double-digit growth, high margins, and a cash-rich balance sheet. The company's return on capital employed is 30%, and its revenue, net income, and free cash flow have grown at a CAGR of 26%, 38%, and 50%, respectively, over the last 10 years. Arista's gross, operating, and net margins are 64%, 43%, and 40%, respectively.