Back to top

Image: Bigstock

Is ANET Stock a Smart Investment Option Before Q3 Earnings Release?

Read MoreHide Full Article

Key Takeaways

  • Arista Networks reports Q3 2026 results on Nov. 3, with revenue of $3.3 billion and EPS of $1.08 expected.
  • AI networking growth, new 1.6-terabit platforms and enterprise security solutions could support revenue.
  • Arista's 27.1% ROIC and rising estimates support growth, while highcomponent costs pose risks.

Arista Networks, Inc. (ANET - Free Report) is scheduled to report third-quarter 2026 earnings after the closing bell on Nov. 3. The Zacks Consensus Estimate for revenues and earnings is pegged at $3.3 billion and $1.08 per share, respectively. Earnings estimates for Arista for 2026 have increased 0.9% to $4.12 per share over the past 60 days and jumped 1.3% to $5.12 per share for 2027.

ANET Estimate Trend

Zacks Investment Research
Image Source: Zacks Investment Research

Earnings Surprise History

The communications components provider delivered a four-quarter earnings surprise of 8.8%, on average, beating estimates on each occasion. In the last reported quarter, the company pulled off an earnings surprise of 14.6%.

Zacks Investment Research
Image Source: Zacks Investment Research

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Arista for the third quarter. 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
 
Arista currently has an Earnings ESP of 0.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Shaping the Upcoming Results

AI infrastructure remains a key growth driver for Arista. Its Etherlink portfolio has surpassed 100 cumulative AI fabric customers. The introduction of its 7060XE7 Series has extended Arista’s offerings into next-generation 1.6-terabit networking. These platforms are designed to support increasingly demanding AI workloads through high-bandwidth connectivity and advanced cooling options. Continued adoption of Ethernet-based AI infrastructure and expansion across scale-up, scale-out and scale-across deployments could support revenue growth in the September quarter.

During the quarter, Arista introduced AI-Driven Zero Trust Branch, integrating AI-powered security, identity-based access, and cloud-managed networking into a unified platform. The solution enhances branch protection, simplifies policy enforcement, improves operational efficiency, and enables secure, scalable connectivity for distributed enterprises and hybrid work environments. Such innovative product launches are expected to have a favorable impact on third-quarter results.

Arista's broader networking portfolio may provide additional support. Its software-driven Extensible Operating System, CloudVision platform and enterprise campus networking offerings help address requirements beyond hyperscale data centers. Growth in its installed customer base also supports demand for maintenance, support and other services.

Price Performance

Over the past year, Arista shares have gained 19.3% against the industry’s decline of 10.5%, lagging peers like Hewlett Packard Enterprise (HPE - Free Report) and Cisco Systems, Inc. (CSCO - Free Report) . Cisco has gained 54.2%, while Hewlett Packard has soared 150.9% during this period.

Zacks Investment Research
Image Source: Zacks Investment Research

Key Valuation Metric

From a valuation standpoint, Arista appears to be trading at a premium compared with the industry and above its mean. Going by the price/earnings ratio, the company's shares currently trade at 37.83 forward earnings, higher than 28.67 for the industry and lower than the stock’s mean of 45.

Zacks Investment Research
Image Source: Zacks Investment Research

Investment Consideration

Arista's growth outlook remains supported by expanding AI infrastructure investment, demand for high-speed Ethernet networking and continued product innovation. Supply chain execution is another important aspect. Management reported progress in supplier diversification, component availability and manufacturing capacity, but industry-wide component tightness and higher procurement costs persist. Arista's multiyear purchase commitments reached approximately $9.7 billion by the end of the second quarter, reflecting efforts to secure components and meet expected demand.

Based on our proprietary calculation, trailing 12-month return on invested capital (ROIC) is 27.1%, above Arista’s 10-year median of 23.9% and the 12.6% industry median; the 3-year median of 27.1% also shows that returns have remained elevated recently. ROIC helps investors assess whether growth is being generated with productive use of committed capital. Arista’s software-driven architecture, strong operating profitability and asset-light outsourced manufacturing model support attractive capital efficiency.

End Note

Arista enters the third quarter of 2026 with strong AI networking momentum and a growing product portfolio. A strong focus on innovation, broader enterprise adoption and supply chain improvements are major tailwinds. Upward estimate revision reflects growing investors’ confidence in the stock’s growth potential. With a Zacks Rank #2 and strong price performance, Arista appears to be a good investment option at present.

Published in