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Will Healthy Revenue Growth Aid Arista's (ANET) Q2 Earnings?
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Arista Networks, Inc. (ANET - Free Report) is set to report second-quarter 2023 results on Jul 31, after the closing bell. The company delivered a trailing four-quarter earnings surprise of 14.73%, on average. In the last reported quarter, it delivered an earnings surprise of 5.93%, with the bottom line surpassing the Zacks Consensus Estimate by 8 cents.
The company is likely to report higher revenues year over year, driven by solid demand for its cloud networking solutions and its strong product portfolio that offers highly scalable, programmable data-driven automation, analytics and world-class support services. Its focus on integrating advanced AI, ML technology into its solutions, and optimization of manufacturing output are positives.
Factors at Play
During the quarter, Arista announced the development of Healthcare Network as a Service, an integrated solution to support various requirements of healthcare organizations and ensure a premium experience for end users. The service will offer a secure networking infrastructure to healthcare entities by delivering the necessary architecture and firewalls for high-quality patient care. Healthcare Network as a Service utilizes Arista Cognitive Unified Edge, powered by ML capabilities, to provide key insights related to Electronic Health Record systems. This is likely to get reflected in the upcoming results.
During the second quarter, Arista introduced an AI-powered network identity service. With the introduction of a new service in Arista Guardian for Network Identity (CV AGNI), the company intends to extend its zero-trust networking approach into enterprise security. CV AGNI integrates AI and ML capabilities to enhance the security of IT operations with simplified deployment. These are likely to have translated into incremental revenues in the quarter.
Our estimate for total product revenues is pegged at $1,164.3 million, suggesting a 31.4% year-over-year improvement. Our estimate for service revenues is pegged at $211.9 million, indicating an improvement from the $166.1 million reported in the year-ago quarter.
For the June quarter, the Zacks Consensus Estimate for revenues is pegged at $1,380 million, indicating an increase from the year-ago quarter’s reported figure of $1,052 million. Adjusted earnings per share are pegged at $1.44, which suggests an improvement from $1.08 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. That is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.31%, with both pegged at $1.44. 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:
QUALCOMM Incorporated (QCOM - Free Report) has an Earnings ESP of +3.68% and carries a Zacks Rank of 3. The company is set to report quarterly numbers on Aug 2.
ON Semiconductor (ON - Free Report) has an Earnings ESP of +1.34% and carries a Zacks Rank of 2. The company is set to report quarterly numbers on Jul 31.
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Will Healthy Revenue Growth Aid Arista's (ANET) Q2 Earnings?
Arista Networks, Inc. (ANET - Free Report) is set to report second-quarter 2023 results on Jul 31, after the closing bell. The company delivered a trailing four-quarter earnings surprise of 14.73%, on average. In the last reported quarter, it delivered an earnings surprise of 5.93%, with the bottom line surpassing the Zacks Consensus Estimate by 8 cents.
The company is likely to report higher revenues year over year, driven by solid demand for its cloud networking solutions and its strong product portfolio that offers highly scalable, programmable data-driven automation, analytics and world-class support services. Its focus on integrating advanced AI, ML technology into its solutions, and optimization of manufacturing output are positives.
Factors at Play
During the quarter, Arista announced the development of Healthcare Network as a Service, an integrated solution to support various requirements of healthcare organizations and ensure a premium experience for end users. The service will offer a secure networking infrastructure to healthcare entities by delivering the necessary architecture and firewalls for high-quality patient care. Healthcare Network as a Service utilizes Arista Cognitive Unified Edge, powered by ML capabilities, to provide key insights related to Electronic Health Record systems. This is likely to get reflected in the upcoming results.
During the second quarter, Arista introduced an AI-powered network identity service. With the introduction of a new service in Arista Guardian for Network Identity (CV AGNI), the company intends to extend its zero-trust networking approach into enterprise security. CV AGNI integrates AI and ML capabilities to enhance the security of IT operations with simplified deployment. These are likely to have translated into incremental revenues in the quarter.
Our estimate for total product revenues is pegged at $1,164.3 million, suggesting a 31.4% year-over-year improvement. Our estimate for service revenues is pegged at $211.9 million, indicating an improvement from the $166.1 million reported in the year-ago quarter.
For the June quarter, the Zacks Consensus Estimate for revenues is pegged at $1,380 million, indicating an increase from the year-ago quarter’s reported figure of $1,052 million. Adjusted earnings per share are pegged at $1.44, which suggests an improvement from $1.08 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. That is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.31%, with both pegged at $1.44. 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:
Monolithic Power Systems, Inc. (MPWR - Free Report) is set to release quarterly numbers on Jul 31. It has an Earnings ESP of +0.31% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
QUALCOMM Incorporated (QCOM - Free Report) has an Earnings ESP of +3.68% and carries a Zacks Rank of 3. The company is set to report quarterly numbers on Aug 2.
ON Semiconductor (ON - Free Report) has an Earnings ESP of +1.34% and carries a Zacks Rank of 2. The company is set to report quarterly numbers on Jul 31.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.