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Key Reasons to Add Arista (ANET) Stock to Your Portfolio Now
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With stellar fourth-quarter 2017 results, robust product portfolio and strong fundamentals, Arista Networks Inc. (ANET - Free Report) appears a promising pick right now. Moreover, it has been a favorite with investors, courtesy of its rising share price and estimates.
The company has been witnessing upward estimate revisions, reflecting analysts’ optimism. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 10.3% upward to $6.88 per share, over the last 60 days. As a result, the stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arista’s shares have returned 99.9% year over year, substantially outperforming the 7.6% rally of the industry.
Notably, the companyhas a number of other aspects that make it an attractive investment option.
Reasons Why Aristais an Attractive Pick
Upbeat Q4 Results: The company delivered non-GAAP earnings of $1.71 per share in fourth-quarter 2017, which comfortably surpassed the Zacks Consensus Estimate of $1.45. The figure also surged 64.4% on a year-over-year basis.
Revenues of $467.9 million soared 42.7% from the year-ago quarter and outpaced the Zacks Consensus Estimate of $464 million. Further, the figure came ahead of management’s guidance of $450-$464 million. Product revenues (87% of total revenues) surged 40.9% to $407.2 million. Service revenues (13% of total revenues) rose 55.7% to $60.7 million.
Positive Earnings Surprise History: Aristahas an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in the trailing four quarters, recording a positive average earnings surprise of 25.25%.
Products Rollouts — Key Growth Drivers: Recently, the company expanded cloud-grade routing with the launch of its latest Arista EOS (Extensible Operating System) and CloudVision software.
It also launched Arista Any Cloud software platform, which helps in reducing operational costs as well as complexity for enterprises by simplifying integration and management of hybrid clouds across private cloud data centers and public cloud providers.
Arista is benefiting from strong demand for 100-gigabit routing and switching products, particularly from cloud titans. The company’s robust product portfolio remains a key catalyst.
Other Positives:The company stated that visibility around cloud titans remains strong for the coming years. Management noted that FlexRoute license (almost 150 customers) has helped it enter additional layers of the spine for routing and data-center interconnect, where Cisco Systems Inc (CSCO - Free Report) and Juniper Networks Inc. (JNPR - Free Report) were dominant names.
Moreover, ample cash balance provides Arista the flexibility required to pursue any growth strategy, acquisitions or otherwise.
This apart, we believe that Arista is well poised to benefit from strong demand for its data center switches. Per Transparency Market Research (TMR), the data center networking market is likely to grow at a CAGR of 15.5% between 2017 and 2025. At this pace, the market’s valuation is forecasted to reach $228.40 billion by the end of 2025, from $63.05 billion in 2016. The company’s switches and routers support the high-end cloud networking market that require fast throughput at low cost. The robust product portfolio is aiding Arista win customers on a regular basis, consequently boosting top-line growth.
Other Key Picks
NVIDIA Corporation (NVDA - Free Report) is another top-ranked stock which you may consider, sporting a Zacks Rank #1.
NVIDIA has a long-term EPS growth rate of 10.25%.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Image: Bigstock
Key Reasons to Add Arista (ANET) Stock to Your Portfolio Now
With stellar fourth-quarter 2017 results, robust product portfolio and strong fundamentals, Arista Networks Inc. (ANET - Free Report) appears a promising pick right now. Moreover, it has been a favorite with investors, courtesy of its rising share price and estimates.
The company has been witnessing upward estimate revisions, reflecting analysts’ optimism. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 10.3% upward to $6.88 per share, over the last 60 days. As a result, the stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arista’s shares have returned 99.9% year over year, substantially outperforming the 7.6% rally of the industry.
Notably, the companyhas a number of other aspects that make it an attractive investment option.
Reasons Why Aristais an Attractive Pick
Upbeat Q4 Results: The company delivered non-GAAP earnings of $1.71 per share in fourth-quarter 2017, which comfortably surpassed the Zacks Consensus Estimate of $1.45. The figure also surged 64.4% on a year-over-year basis.
Revenues of $467.9 million soared 42.7% from the year-ago quarter and outpaced the Zacks Consensus Estimate of $464 million. Further, the figure came ahead of management’s guidance of $450-$464 million. Product revenues (87% of total revenues) surged 40.9% to $407.2 million. Service revenues (13% of total revenues) rose 55.7% to $60.7 million.
Positive Earnings Surprise History: Aristahas an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in the trailing four quarters, recording a positive average earnings surprise of 25.25%.
Products Rollouts — Key Growth Drivers: Recently, the company expanded cloud-grade routing with the launch of its latest Arista EOS (Extensible Operating System) and CloudVision software.
It also launched Arista Any Cloud software platform, which helps in reducing operational costs as well as complexity for enterprises by simplifying integration and management of hybrid clouds across private cloud data centers and public cloud providers.
Arista is benefiting from strong demand for 100-gigabit routing and switching products, particularly from cloud titans. The company’s robust product portfolio remains a key catalyst.
Other Positives:The company stated that visibility around cloud titans remains strong for the coming years. Management noted that FlexRoute license (almost 150 customers) has helped it enter additional layers of the spine for routing and data-center interconnect, where Cisco Systems Inc (CSCO - Free Report) and Juniper Networks Inc. (JNPR - Free Report) were dominant names.
Moreover, ample cash balance provides Arista the flexibility required to pursue any growth strategy, acquisitions or otherwise.
This apart, we believe that Arista is well poised to benefit from strong demand for its data center switches. Per Transparency Market Research (TMR), the data center networking market is likely to grow at a CAGR of 15.5% between 2017 and 2025. At this pace, the market’s valuation is forecasted to reach $228.40 billion by the end of 2025, from $63.05 billion in 2016. The company’s switches and routers support the high-end cloud networking market that require fast throughput at low cost. The robust product portfolio is aiding Arista win customers on a regular basis, consequently boosting top-line growth.
Other Key Picks
NVIDIA Corporation (NVDA - Free Report) is another top-ranked stock which you may consider, sporting a Zacks Rank #1.
NVIDIA has a long-term EPS growth rate of 10.25%.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>