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Why Arista Networks (ANET) Dipped More Than Broader Market Today
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Arista Networks (ANET - Free Report) closed at $280.71 in the latest trading session, marking a -0.41% move from the prior day. The stock trailed the S&P 500, which registered a daily loss of 0.19%. Meanwhile, the Dow experienced a rise of 0.1%, and the technology-dominated Nasdaq saw a decrease of 0.54%.
Shares of the cloud networking company have appreciated by 6.16% over the course of the past month, outperforming the Computer and Technology sector's gain of 2.36% and the S&P 500's gain of 3.18%.
The upcoming earnings release of Arista Networks will be of great interest to investors. On that day, Arista Networks is projected to report earnings of $1.71 per share, which would represent year-over-year growth of 19.58%. At the same time, our most recent consensus estimate is projecting a revenue of $1.54 billion, reflecting a 14.19% rise from the equivalent quarter last year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $7.41 per share and a revenue of $6.54 billion, indicating changes of +6.77% and +11.55%, respectively, from the former year.
It is also important to note the recent changes to analyst estimates for Arista Networks. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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 last 30 days, the Zacks Consensus EPS estimate has moved 2.89% higher. Arista Networks currently has a Zacks Rank of #2 (Buy).
With respect to valuation, Arista Networks is currently being traded at a Forward P/E ratio of 38.05. This represents a premium compared to its industry's average Forward P/E of 23.56.
It's also important to note that ANET currently trades at a PEG ratio of 2.18. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. ANET's industry had an average PEG ratio of 1.94 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 74, which puts it in the top 30% 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 follow all of these stock-moving metrics, and many more, on Zacks.com.
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Why Arista Networks (ANET) Dipped More Than Broader Market Today
Arista Networks (ANET - Free Report) closed at $280.71 in the latest trading session, marking a -0.41% move from the prior day. The stock trailed the S&P 500, which registered a daily loss of 0.19%. Meanwhile, the Dow experienced a rise of 0.1%, and the technology-dominated Nasdaq saw a decrease of 0.54%.
Shares of the cloud networking company have appreciated by 6.16% over the course of the past month, outperforming the Computer and Technology sector's gain of 2.36% and the S&P 500's gain of 3.18%.
The upcoming earnings release of Arista Networks will be of great interest to investors. On that day, Arista Networks is projected to report earnings of $1.71 per share, which would represent year-over-year growth of 19.58%. At the same time, our most recent consensus estimate is projecting a revenue of $1.54 billion, reflecting a 14.19% rise from the equivalent quarter last year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $7.41 per share and a revenue of $6.54 billion, indicating changes of +6.77% and +11.55%, respectively, from the former year.
It is also important to note the recent changes to analyst estimates for Arista Networks. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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 last 30 days, the Zacks Consensus EPS estimate has moved 2.89% higher. Arista Networks currently has a Zacks Rank of #2 (Buy).
With respect to valuation, Arista Networks is currently being traded at a Forward P/E ratio of 38.05. This represents a premium compared to its industry's average Forward P/E of 23.56.
It's also important to note that ANET currently trades at a PEG ratio of 2.18. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. ANET's industry had an average PEG ratio of 1.94 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 74, which puts it in the top 30% 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 follow all of these stock-moving metrics, and many more, on Zacks.com.