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Can Top-Line Growth Buoy Arista's (ANET) Earnings in Q1?
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Arista Networks, Inc. (ANET - Free Report) is scheduled to report first-quarter 2021 results on May 4, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 3.8% with the bottom line surpassing the Zacks Consensus Estimate by 9 cents. Arista delivered a trailing four-quarter earnings surprise of 8.1%, on average.
The Santa Clara, CA-based cloud networking company is likely to have recorded higher revenues year over year, supported by overall healthy demand. However, due to COVID-19 adversities, Arista is likely to have experienced some supply-chain issues resulting in extended lead time and constrained shipments.
Factors at Play
During the first quarter, Arista augmented its ability to identify threats and perform forensic investigations within the Awake Security business. The latest enhancements include features that make the platform more intuitive for security analysts. Awake Security has been incorporated into Arista’s zero trust and DANZ Monitoring Fabric (DMF) solutions. DMF enables IT operators to monitor all user, device and application traffic by gaining complete visibility. It also enables unmanaged device discovery and risk tracking, threat hunting and investigations, and intelligent user experience. These capabilities are likely to have translated into incremental revenues in the quarter.
Arista successfully tested the interoperability features between multiple 400G ZR suppliers. This multi-vendor testing sets the foundation for a healthy, interoperable, coherent optics ecosystem, providing cloud service providers with a multitude of options for building high speed Data Center Interconnect networks. This is likely to be reflected in the upcoming results.
Management expects to have witnessed continued growth within Enterprise customers with strength in adjacencies, software and services. For the March quarter, the Zacks Consensus Estimate for revenues is pegged at $640 million, indicating a 22.4% increase from the year-ago quarter’s reported figure. Adjusted earnings per share are pegged at $2.38, which suggests an improvement from $2.02 recorded in the year-earlier quarter.
Earnings Whispers
Our proven model does not predict an earnings beat for Arista this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -1.83%, with the former pegged at $2.34 and the latter at $2.38. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
The Earnings ESP for Clear Channel Outdoor Holdings, Inc. (CCO - Free Report) is +30.67% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on May 10.
The Earnings ESP for Duke Energy Corporation (DUK - Free Report) is +0.16% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on May 10.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Can Top-Line Growth Buoy Arista's (ANET) Earnings in Q1?
Arista Networks, Inc. (ANET - Free Report) is scheduled to report first-quarter 2021 results on May 4, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 3.8% with the bottom line surpassing the Zacks Consensus Estimate by 9 cents. Arista delivered a trailing four-quarter earnings surprise of 8.1%, on average.
The Santa Clara, CA-based cloud networking company is likely to have recorded higher revenues year over year, supported by overall healthy demand. However, due to COVID-19 adversities, Arista is likely to have experienced some supply-chain issues resulting in extended lead time and constrained shipments.
Factors at Play
During the first quarter, Arista augmented its ability to identify threats and perform forensic investigations within the Awake Security business. The latest enhancements include features that make the platform more intuitive for security analysts. Awake Security has been incorporated into Arista’s zero trust and DANZ Monitoring Fabric (DMF) solutions. DMF enables IT operators to monitor all user, device and application traffic by gaining complete visibility. It also enables unmanaged device discovery and risk tracking, threat hunting and investigations, and intelligent user experience. These capabilities are likely to have translated into incremental revenues in the quarter.
Arista successfully tested the interoperability features between multiple 400G ZR suppliers. This multi-vendor testing sets the foundation for a healthy, interoperable, coherent optics ecosystem, providing cloud service providers with a multitude of options for building high speed Data Center Interconnect networks. This is likely to be reflected in the upcoming results.
Management expects to have witnessed continued growth within Enterprise customers with strength in adjacencies, software and services. For the March quarter, the Zacks Consensus Estimate for revenues is pegged at $640 million, indicating a 22.4% increase from the year-ago quarter’s reported figure. Adjusted earnings per share are pegged at $2.38, which suggests an improvement from $2.02 recorded in the year-earlier quarter.
Earnings Whispers
Our proven model does not predict an earnings beat for Arista this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -1.83%, with the former pegged at $2.34 and the latter at $2.38. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Arista Networks, Inc. Price and EPS Surprise
Arista Networks, Inc. price-eps-surprise | Arista Networks, Inc. Quote
Zacks Rank: Arista currently has a Zacks Rank #3.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
T-Mobile US, Inc. (TMUS - Free Report) is set to release quarterly numbers on May 4. It has an Earnings ESP of +20.88% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Clear Channel Outdoor Holdings, Inc. (CCO - Free Report) is +30.67% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on May 10.
The Earnings ESP for Duke Energy Corporation (DUK - Free Report) is +0.16% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on May 10.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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