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Arista Brings Optical Line System for Simplified Operations

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Arista Networks, Inc. ANET recently announced that it has launched an optical line system in an Octal Small Form-factor Pluggable (OSFP) module. The Santa Clara, CA-based company’s OSFP-Line System addresses the needs of Tier II cloud and Internet service providers for high bandwidth links that are easy to operate. Its share price rose 7.7% in yesterday’s trading session to close at $199.96.

Currently in testing, the OSFP-LS is likely to be available in the second half of 2020. It brings new capabilities to colocation operators, edge compute and metro Data Center Interconnect applications. The Arista OSFP-LS is a compact, low power and cost-effective solution for increasing bandwidth between data centers without the need for external optical line systems. It is easier to deploy than conventional external line systems that require their own power feed and control management software.

By joining a cloud-grade line system with plug-and-play simplicity, the OSFP-LS protects data center operators from capacity, space and power constraints. The price of the product has not been disclosed. Further, Arista introduced CloudEOS, delivering two new offerings that solve critical networking challenges in multi cloud and cloud native environments.

On Feb 13, Arista announced that it has acquired Big Switch Networks — a network monitoring and Software Defined Networking pioneer. The buyout will further strengthen Arista’s network monitoring and observability suite delivered through its software platform CloudVision and Data ANalyZer capabilities.

In the last reported quarter, the company’s revenues decreased 7.2% year over year to $552.5 million but were above the midpoint of the company’s guidance of $540-$560 million. This was due to volatility in the cloud business given a sudden shift in procurement strategy from a key cloud titan.

Arista’s product portfolio facilitates the implementation of high-performance, highly scalable and appropriate solutions for every environment. Its network switches enable functionality such as large routing tables, hybrid cloud traffic patterns and real-time monitoring in a single chassis, meeting the requirements of commercial, private and hybrid clouds.

The company continues to benefit from the expanding cloud networking market, owing to strong demand for scalable infrastructure. In addition to high capacity and easy availability, its cloud networking solutions promise predictable performance along with programmability that enables integration with third-party applications.

Apart from driving cloud area networking, Arista boasts the number one market position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. The company aims to sustain profitable revenue growth and healthy cash generation throughout 2020 on the back of industry-leading product offerings.

Arista has a long-term earnings growth expectation of 15.5%. It topped earnings estimates in the trailing four quarters, the surprise being 10.3%, on average. The stock has returned 3.8% against the industry’s decline of 10.3% in the past three months.

Arista currently has a Zacks Rank #3 (Hold).  

A few better-ranked stocks in the broader industry are PCTEL, Inc. PCTI, Motorola Solutions, Inc. MSI and Qualcomm Incorporated QCOM, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

PCTEL surpassed earnings estimates in the trailing four quarters, the beat being 108.9%, on average.

Motorola topped earnings estimates in the trailing four quarters, the surprise being 6.6%, on average. 

Qualcomm surpassed earnings estimates in the trailing four quarters, the beat being 10%, on average.

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