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Arista Networks (ANET) Gains As Market Dips: What You Should Know

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Arista Networks (ANET - Free Report) closed at $120.91 in the latest trading session, marking a +0.25% move from the prior day. This move outpaced the S&P 500's daily loss of 0.43%. Meanwhile, the Dow lost 0.34%, and the Nasdaq, a tech-heavy index, lost 0.62%.

Coming into today, shares of the cloud networking company had lost 6.82% in the past month. In that same time, the Computer and Technology sector lost 9.41%, while the S&P 500 lost 6.57%.

Arista Networks will be looking to display strength as it nears its next earnings release. In that report, analysts expect Arista Networks to post earnings of $0.80 per share. This would mark year-over-year growth of 26.98%. Meanwhile, our latest consensus estimate is calling for revenue of $854.05 million, up 27.94% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.68 per share and revenue of $3.84 billion, which would represent changes of +28.22% and +30.42%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Arista Networks. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 6.66% higher. Arista Networks is holding a Zacks Rank of #1 (Strong Buy) right now.

Investors should also note Arista Networks's current valuation metrics, including its Forward P/E ratio of 32.76. This valuation marks a premium compared to its industry's average Forward P/E of 19.51.

Also, we should mention that ANET has a PEG ratio of 2.13. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Communication - Components stocks are, on average, holding a PEG ratio of 1.76 based on yesterday's closing prices.

The Communication - Components industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 109, which puts it in the top 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ANET in the coming trading sessions, be sure to utilize Zacks.com.


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