Analyzing Arista Networks (NYSE:ANET) and Nokia (NYSE:NOK)

Nokia (NYSE:NOK) and Arista Networks (NYSE:ANET) are both large-cap technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, risk and valuation.

Risk & Volatility

Nokia has a beta of 1.24, meaning that its share price is 24% 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 Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nokia	2	5	16	0	2.61
Arista Networks	0	1	21	2	3.04

Nokia presently has a consensus price target of $13.41, suggesting a potential upside of 60.67%. Arista Networks has a consensus price target of $232.95, suggesting a potential upside of 41.58%. Given Nokia’s higher possible upside, equities research analysts plainly believe Nokia is more favorable than Arista Networks.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Nokia	3.80%	10.48%	5.94%
Arista Networks	38.37%	30.65%	19.44%

Valuation & Earnings

This table compares Nokia 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
Nokia	$22.50 billion	2.13	$736.54 million	$0.16	52.16
Arista Networks	$10.54 billion	19.69	$3.51 billion	$3.17	51.90

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

Institutional & Insider Ownership

5.3% of Nokia shares are held by institutional investors. Comparatively, 82.5% of Arista Networks shares are held by institutional investors. 2.7% of Arista Networks shares are held 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.

Summary

Arista Networks beats Nokia on 12 of the 15 factors compared between the two stocks.

About Nokia

Nokia Oyj provides mobile, fixed, and cloud network solutions worldwide. The company operates through four segments: Network Infrastructure, Mobile Networks, Cloud and Network Services, and Nokia Technologies. The company provides fixed networking solutions, such as fiber and copper-based access infrastructure, in-home Wi-Fi solutions, and cloud and virtualization services; IP networking solutions, including IP access, aggregation, and edge and core routing for residential, mobile, enterprise and cloud applications; optical networks solutions that provides optical transport networks for metro, regional, and long-haul applications, and subsea applications; and submarine networks for undersea cable transmission. It serves its products and services to communications service providers, webscales and hyperscalers, digital industries, and government. The company also offers mobile technology products and services for radio access networks and microwave radio links for transport networks, network management solutions, as well as network planning, optimization, network deployment, and technical support services. In addition, it offers cloud and network services, including core network solutions, such as voice and packet core; business applications, such as security, automation, and monetization; cloud and cognitive services; and enterprise solutions, including private wireless and industrial automation. Further, the company licenses intellectual property, including patents, technologies, and the Nokia brand. Nokia Oyj was founded in 1865 and is headquartered in Espoo, Finland.

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.