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Arista Networks (ANET) Exceeds Market Returns: Some Facts to Consider

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In the latest market close, Arista Networks (ANET - Free Report) reached $269.58, with a +1.96% movement compared to the previous day. The stock's performance was ahead of the S&P 500's daily gain of 0.76%. At the same time, the Dow added 0.59%, and the tech-heavy Nasdaq gained 1.12%.

Shares of the cloud networking company have appreciated by 12.27% over the course of the past month, outperforming the Computer and Technology sector's gain of 4.99% and the S&P 500's gain of 2.5%.

Analysts and investors alike will be keeping a close eye on the performance of Arista Networks in its upcoming earnings disclosure. The company's earnings report is set to go public on February 12, 2024. The company is predicted to post an EPS of $1.70, indicating a 20.57% growth compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.53 billion, up 19.98% from the year-ago period.

Any recent changes to analyst estimates for Arista Networks should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, there's been a 0.31% rise in the Zacks Consensus EPS estimate. Arista Networks is currently sporting a Zacks Rank of #1 (Strong Buy).

Valuation is also important, so investors should note that Arista Networks has a Forward P/E ratio of 36.66 right now. This signifies a premium in comparison to the average Forward P/E of 19.21 for its industry.

Meanwhile, ANET's PEG ratio is currently 1.85. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Communication - Components industry currently had an average PEG ratio of 1.98 as of yesterday's close.

The Communication - Components industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 110, finds itself in the top 44% echelons of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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