Arista Networks (ANET) Laps the Stock Market: Here's Why
The latest trading session saw Arista Networks (ANET) ending at $289.98, denoting a +0.54% adjustment from its last day's close. The stock outperformed the S&P 500, which registered a daily gain of 0.11%. Meanwhile, the Dow gained 0.12%, and the Nasdaq, a tech-heavy index, lost 0.12%.
The cloud networking company's stock has climbed by 5.58% in the past month, exceeding the Computer and Technology sector's gain of 3.59% and the S&P 500's gain of 3.55%.
The upcoming earnings release of Arista Networks will be of great interest to investors. In that report, analysts expect Arista Networks to post earnings of $1.71 per share. This would mark year-over-year growth of 19.58%. Simultaneously, our latest consensus estimate expects the revenue to be $1.54 billion, showing a 14.19% escalation compared to the year-ago quarter.
ANET's full-year Zacks Consensus Estimates are calling for earnings of $7.41 per share and revenue of $6.54 billion. These results would represent year-over-year changes of +6.77% and +11.55%, respectively.
Any recent changes to analyst estimates for Arista Networks should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Arista Networks is currently sporting a Zacks Rank of #2 (Buy).
Digging into valuation, Arista Networks currently has a Forward P/E ratio of 38.94. This signifies a premium in comparison to the average Forward P/E of 19.1 for its industry.
Meanwhile, ANET's PEG ratio is currently 2.23. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The average PEG ratio for the Communication - Components industry stood at 1.54 at the close of the market yesterday.
The Communication - Components industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 54, which puts it in the top 22% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Arista Networks, Inc. (ANET) : Free Stock Analysis Report
