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Arista Networks (ANET) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Arista Networks (ANET - Free Report) closed at $321.73, marking a +1.04% move from the previous day. This change outpaced the S&P 500's 0.22% gain on the day. At the same time, the Dow added 0.15%, and the tech-heavy Nasdaq gained 0.6%.

Coming into today, shares of the cloud networking company had gained 14.63% in the past month. In that same time, the Computer and Technology sector gained 4.32%, while the S&P 500 gained 2.39%.

Wall Street will be looking for positivity from ANET as it approaches its next earnings report date. The company is expected to report EPS of $2.07, up 24.7% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $593.57 million, up 25.63% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.26 per share and revenue of $2.64 billion, which would represent changes of +16.33% and +22.76%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for ANET. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. ANET is holding a Zacks Rank of #1 (Strong Buy) right now.

Digging into valuation, ANET currently has a Forward P/E ratio of 34.38. This represents a premium compared to its industry's average Forward P/E of 19.82.

Also, we should mention that ANET has a PEG ratio of 1.71. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Communication - Components industry currently had an average PEG ratio of 2.08 as of yesterday's close.

The Communication - Components industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 30, which puts it in the top 12% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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