Market Value Added (MVA)
Market value added (MVA) is the difference between a firm fair value and its invested capital. MVA is a measure of the value a company has created in excess of the resources already committed to the enterprise.
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MVA
Arista Networks Inc., MVA calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2 Invested capital. See details »
The financial data reflects significant growth in key performance indicators over the five-year period ending in 2024.
- Market (fair) value of Arista
- The market value shows a consistent upward trajectory from approximately $21.85 billion in 2020 to about $125.57 billion in 2024. This represents a nearly six-fold increase over the period, with particularly strong growth between 2022 and 2024, indicating heightened investor confidence or market recognition of the company's value.
- Invested capital
- Invested capital also increased steadily, starting at roughly $1.87 billion in 2020 and reaching nearly $5.87 billion by 2024. The growth in invested capital accelerated notably between 2021 and 2023, reflecting increased deployment of resources into business operations or expansion.
- Market value added (MVA)
- The MVA, representing the difference between market value and invested capital, follows a pattern similar to the market value, with a significant increase from approximately $19.99 billion in 2020 to about $119.71 billion in 2024. The rapid expansion in MVA, especially after 2022, highlights the company's ability to generate value well beyond the capital invested, suggesting effective capital utilization and strong market perception of future growth prospects.
Overall, the data indicates robust growth in both the company's market valuation and capital investment, with MVA sharply increasing, which underscores enhanced market valuation that outpaces capital growth. This trend points to strong value creation and positive market sentiment over the analyzed period.
MVA Spread Ratio
Arista Networks Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Apple Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2024 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added has exhibited a consistent upward trend over the five-year period. Starting from approximately 19.99 billion US dollars in 2020, it more than doubled to about 35.40 billion in 2021. The growth continued, albeit at a slower pace, reaching nearly 37.96 billion in 2022. A significant increase occurred in 2023, with MVA almost doubling again to 75.23 billion, followed by another substantial rise to 119.71 billion by the end of 2024. This demonstrates a strong and accelerating value creation for shareholders during this timeframe.
- Invested Capital
- Invested Capital has also grown steadily but at a more moderate rate compared to MVA. It increased slightly from approximately 1.87 billion US dollars in 2020 to 1.89 billion in 2021, before experiencing a more pronounced rise to about 3.10 billion in 2022. The upward trend continued with increases to 4.77 billion in 2023 and 5.87 billion by the end of 2024. This indicates that the company has been progressively increasing its capital base, supporting expansion and operational growth.
- MVA Spread Ratio
- The MVA Spread Ratio, expressed as a percentage, reflects the premium generated over the invested capital. It started at a high level of approximately 1071% in 2020 and peaked at nearly 1873% in 2021, suggesting exceptional value creation relative to capital invested. Although the ratio dropped to around 1226% in 2022, it rebounded strongly in the following years, climbing to 1576% in 2023 and reaching its highest point of approximately 2040% in 2024. This indicates that the company’s efficiency in converting invested capital into market value added has generally improved, underscoring enhanced capital productivity and shareholder value generation over time.
- Summary
- Overall, the data demonstrates a robust growth trajectory in both market value added and invested capital, with the value creation significantly outpacing capital growth. The fluctuation and eventual upward trend in the MVA spread ratio emphasize the company's strengthening ability to leverage its invested capital into substantial shareholder wealth. Such financial patterns suggest effective management strategies and positive market perceptions influencing the sustained financial performance across the analyzed periods.
MVA Margin
Arista Networks Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenue | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Apple Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 MVA. See details »
2 2024 Calculation
MVA margin = 100 × MVA ÷ Adjusted revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added demonstrated a strong upward trajectory over the analyzed period. Starting from approximately 19.99 billion US dollars at the end of 2020, it increased significantly year-over-year, reaching nearly 35.40 billion by the end of 2021. Growth continued in 2022 albeit at a slower pace, with MVA reaching about 37.96 billion. However, there was a notable acceleration in 2023, with MVA almost doubling to approximately 75.23 billion, and this upward momentum extended into 2024 with the MVA reaching an estimated 119.71 billion. This pattern indicates substantial value creation for shareholders over these years.
- Adjusted Revenue
- Adjusted revenue exhibited a consistent and strong growth trend between 2020 and 2024. Beginning at roughly 2.39 billion US dollars at the end of 2020, revenue grew steadily each year, rising to approximately 3.23 billion in 2021, 4.49 billion in 2022, 6.33 billion in 2023, and reaching around 8.29 billion in 2024. The continuous year-over-year increase in adjusted revenue suggests effective sales expansion and/or improved business operations contributing to higher income.
- MVA Margin
- The MVA margin, expressed as a percentage, reflects the efficiency with which the company converts revenue into market value creation. The data shows a positive trend, starting at 835.18% in 2020 and increasing to 1097.06% in 2021. This ratio dipped somewhat to 844.93% in 2022 but rebounded strongly in the following years, achieving 1189.41% in 2023 and further rising to 1444.26% in 2024. The overall increase implies that the company's market valuation growth outpaces revenue growth, highlighting increasing market confidence or perceived future growth potential.