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Strength Seen in Arista Networks (ANET): Can Its 9.3% Jump Turn into More Strength?

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Arista Networks (ANET - Free Report) shares soared 9.3% in the last trading session to close at $119.13. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 6.6% loss over the past four weeks.

Arista continues benefiting from the expanding cloud networking market, driven by strong demand for scalable infrastructure. In addition to high capacity and easy availability, its cloud networking solutions promise predictable performance along with programmability that enables integration with third-party applications for network management, automation and orchestration.

The company is riding on strong momentum and diversification across its top verticals and product lines. Arista has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. It is well-poised for growth in data-driven cloud networking business with proactive platforms and predictive operations.

This cloud networking company is expected to post quarterly earnings of $1.05 per share in its upcoming report, which represents a year-over-year change of +41.9%. Revenues are expected to be $1.06 billion, up 41.6% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Arista Networks, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on ANET going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Arista Networks belongs to the Zacks Communication - Components industry. Another stock from the same industry, Altice USA, Inc. (ATUS - Free Report) , closed the last trading session 5.4% higher at $6.50. Over the past month, ATUS has returned -3.9%.

For Altice USA, Inc., the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.34. This represents a change of -41.4% from what the company reported a year ago. Altice USA, Inc. currently has a Zacks Rank of #4 (Sell).


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