Financial Review: Backblaze (NASDAQ:BLZE) versus Arista Networks (NYSE:ANET)

Backblaze (NASDAQ:BLZE) and Arista Networks (NYSE:ANET) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Backblaze	-31.72%	-54.88%	-23.07%
Arista Networks	40.90%	31.05%	21.58%

Valuation & Earnings

This table compares Backblaze and Arista Networks”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Backblaze	$127.63 million	3.64	-$48.53 million	($0.89)	-9.24
Arista Networks	$7.00 billion	23.90	$2.85 billion	$2.54	52.43

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

Insider and Institutional Ownership

54.0% of Backblaze shares are held by institutional investors. Comparatively, 82.5% of Arista Networks shares are held by institutional investors. 3.8% of Backblaze shares are held by company insiders. Comparatively, 3.4% of Arista Networks shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Backblaze has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, Arista Networks has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Backblaze and Arista Networks, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Backblaze	0	0	6	1	3.14
Arista Networks	0	5	14	0	2.74

Backblaze presently has a consensus target price of $10.0714, suggesting a potential upside of 22.52%. Arista Networks has a consensus target price of $138.0714, suggesting a potential upside of 3.68%. Given Backblaze’s stronger consensus rating and higher possible upside, equities analysts clearly believe Backblaze is more favorable than Arista Networks.

Summary

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

About Backblaze

Backblaze, Inc., a storage cloud platform, provides businesses and consumers cloud services to store, use, and protect data in the United States and internationally. The company offers cloud services through a web-scale software infrastructure built on commodity hardware. It also provides Backblaze B2 Cloud Storage, which enables customers to store data, developers to build applications, and partners to expand their use cases. This service is offered as a consumption-based Infrastructure-as-a-Service (IaaS) and serves use cases, such as public, hybrid, and multi-cloud data storage; application development and DevOps; content delivery and edge computing; security and ransomware protection; media management; backup, archive, and tape replacement; repository for analytics, artificial intelligence and machine learning; and Internet of Things. In addition, the company offers Backblaze Computer Backup that automatically backs up data from laptops and desktops for businesses and individuals, which provides a subscription-based Software-as-a-Service and serves use cases, including computer backup, ransomware protection, theft and loss protection, and remote access. It serves the public cloud IaaS storage and Data-Protection-as-a-Service markets. The company was incorporated in 2007 and is headquartered in San Mateo, California.

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.