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Arista Networks (ANET) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Arista Networks (ANET) closed the most recent trading day at $177.88, moving +0.5% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.47%. Elsewhere, the Dow gained 0.95%, while the tech-heavy Nasdaq added 2.3%.

Heading into today, shares of the cloud networking company had lost 21.34% over the past month, outpacing the Computer and Technology sector's loss of 28.18% and the S&P 500's loss of 28.7% in that time.

ANET will be looking to display strength as it nears its next earnings release. In that report, analysts expect ANET to post earnings of $1.88 per share. This would mark a year-over-year decline of 18.61%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $525.96 million, down 11.67% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.69 per share and revenue of $2.36 billion. These totals would mark changes of -10.69% and +2.18%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for ANET. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 1.57% lower. ANET is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that ANET has a Forward P/E ratio of 20.37 right now. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 20.37.

Investors should also note that ANET has a PEG ratio of 1.31 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Communication - Components was holding an average PEG ratio of 1.56 at yesterday's closing price.

The Communication - Components industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 172, putting it in the bottom 33% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within 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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