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Arista Networks (ANET - Free Report) is a Zacks Rank #1 (Strong Buy) that develops, markets, and sells cloud networking solutions globally. The company offers cloud networking solutions that consist of extensible operating systems, a set of network applications, as well as gigabit Ethernet switching and routing platforms.
The stock has held up relatively well compared to most tech companies and the last couple earnings reports are the reason why. Despite all the uncertainty in the marketplace, the stock might be a good place to hide until the market calms down.
More about ANET
The company incorporated in 2004 and is headquartered in Santa Clara, California. It employs almost 3,000 and has a market cap of almost $38 billion. The company went public in June 2014 and currently has more than 7,000 cloud customers worldwide.
Here is how the company describes itself:
Arista Networks is an industry leader in data-driven, client to cloud networking for large data center, campus and routing environments. Arista’s award-winning platforms deliver availability, agility, automation, analytics and security through CloudVision® and Arista EOS®, an advanced network operating system.
Earnings Keeping Bulls Interested
A lot of tech stocks have been sold hard over the last few months, but ANET has heled up relatively well, still trading above the October levels its saw before a large gap higher.
The reasoning is two EPS beats that impressed investors. The earnings report back in November helped the stock higher by over 25% in one day. The company guided fiscal year 2022 revenue growth higher, announced a stock split and a $1B buyback program.
The stock had pulled back with the market into Arista’s next earnings report, which came on February 14th. The company saw a beat on the top line and surprised to the upside by 11%. Arista also guided Q1 revenue higher, seeing $840-860M v the $837M expected.
Management complemented the Arista team on the quarter, which delivered its first billion-dollar cash flow year, despite industry-wide challenges.
Arista is getting some love from analysts, seeing numbers come up across all time-frames over the last 30 days.
For the current quarter, estimates have moved higher by 3.8%, from $0.77 to $0.80. For the current year, we see a 3.6% jump, from $3.53 to $3.66.
After earnings, a handful of analysts also lifted their price targets. Citi reiterated ANET with a Buy and $160 target, up from $150. Morgan Stanley lifted to $144 from $138 and kept its equal weight. Wells Fargo went from $122.50 to $142
The stock has a Forward PE of 33 and pays no dividend. Arista has a Zacks Style Score of “B” in Momentum, but that PE give it a score of “F” in Value
The Technical Take
The stock really took off after the November earnings report, moving from $100 to $148 in just under two months. This happens when most tech stocks were being sold off aggressively. 2022 hasn’t been kind to stocks, so naturally, some profit talking began in the stock.
It pulled back to $120, then dipped to $110 during the initial Russia/Ukraine panic. This was a 61.8% Fib retrace form the October low to December high and we saw buyers step in. The stock almost hit the 200-day as well, which resides at $107 at the moment.
There seems to be clear support at the $110 area, so traders have a good setup at current prices to at least test the 50-day moving average at $129.
A break above that area could eventually bring the stock back to all-time highs.
In Summary
Arista is holding up in a time when most stocks are getting punished. This is often a good sign that some opportunity lies beneath all the fear in the marketplace.
Investors have a great long-term opportunity to buy this dip for all-time highs later in the year. Moreover, traders have a nice short-term setup for higher prices.
This stock, which has a great track record on earnings, could be one of the gems that stick out in 2022.
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Bull of the Day: Arista Networks (ANET)
Arista Networks (ANET - Free Report) is a Zacks Rank #1 (Strong Buy) that develops, markets, and sells cloud networking solutions globally. The company offers cloud networking solutions that consist of extensible operating systems, a set of network applications, as well as gigabit Ethernet switching and routing platforms.
The stock has held up relatively well compared to most tech companies and the last couple earnings reports are the reason why. Despite all the uncertainty in the marketplace, the stock might be a good place to hide until the market calms down.
More about ANET
The company incorporated in 2004 and is headquartered in Santa Clara, California. It employs almost 3,000 and has a market cap of almost $38 billion. The company went public in June 2014 and currently has more than 7,000 cloud customers worldwide.
Here is how the company describes itself:
Arista Networks is an industry leader in data-driven, client to cloud networking for large data center, campus and routing environments. Arista’s award-winning platforms deliver availability, agility, automation, analytics and security through CloudVision® and Arista EOS®, an advanced network operating system.
Earnings Keeping Bulls Interested
A lot of tech stocks have been sold hard over the last few months, but ANET has heled up relatively well, still trading above the October levels its saw before a large gap higher.
The reasoning is two EPS beats that impressed investors. The earnings report back in November helped the stock higher by over 25% in one day. The company guided fiscal year 2022 revenue growth higher, announced a stock split and a $1B buyback program.
The stock had pulled back with the market into Arista’s next earnings report, which came on February 14th. The company saw a beat on the top line and surprised to the upside by 11%. Arista also guided Q1 revenue higher, seeing $840-860M v the $837M expected.
Management complemented the Arista team on the quarter, which delivered its first billion-dollar cash flow year, despite industry-wide challenges.
Arista Networks, Inc. Price and EPS Surprise
Arista Networks, Inc. price-eps-surprise | Arista Networks, Inc. Quote
Estimates Rising
Arista is getting some love from analysts, seeing numbers come up across all time-frames over the last 30 days.
For the current quarter, estimates have moved higher by 3.8%, from $0.77 to $0.80. For the current year, we see a 3.6% jump, from $3.53 to $3.66.
After earnings, a handful of analysts also lifted their price targets. Citi reiterated ANET with a Buy and $160 target, up from $150. Morgan Stanley lifted to $144 from $138 and kept its equal weight. Wells Fargo went from $122.50 to $142
The stock has a Forward PE of 33 and pays no dividend. Arista has a Zacks Style Score of “B” in Momentum, but that PE give it a score of “F” in Value
The Technical Take
The stock really took off after the November earnings report, moving from $100 to $148 in just under two months. This happens when most tech stocks were being sold off aggressively. 2022 hasn’t been kind to stocks, so naturally, some profit talking began in the stock.
It pulled back to $120, then dipped to $110 during the initial Russia/Ukraine panic. This was a 61.8% Fib retrace form the October low to December high and we saw buyers step in. The stock almost hit the 200-day as well, which resides at $107 at the moment.
There seems to be clear support at the $110 area, so traders have a good setup at current prices to at least test the 50-day moving average at $129.
A break above that area could eventually bring the stock back to all-time highs.
In Summary
Arista is holding up in a time when most stocks are getting punished. This is often a good sign that some opportunity lies beneath all the fear in the marketplace.
Investors have a great long-term opportunity to buy this dip for all-time highs later in the year. Moreover, traders have a nice short-term setup for higher prices.
This stock, which has a great track record on earnings, could be one of the gems that stick out in 2022.