Here's Why Arista Networks (ANET) Gained But Lagged the Market Today
The latest trading session saw Arista Networks (ANET) ending at $237.73, denoting a +0.08% adjustment from its last day's close. The stock lagged the S&P 500's daily gain of 0.14%. On the other hand, the Dow registered a gain of 0.3%, and the technology-centric Nasdaq increased by 0.16%.
Coming into today, shares of the cloud networking company had gained 9.33% in the past month. In that same time, the Computer and Technology sector gained 4.87%, while the S&P 500 gained 4.89%.
Investors will be eagerly watching for the performance of Arista Networks in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $1.70, reflecting a 20.57% increase from the same quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $1.53 billion, indicating a 19.93% increase compared to the same quarter of the previous year.
For the full year, the Zacks Consensus Estimates project earnings of $6.55 per share and a revenue of $5.85 billion, demonstrating changes of +43.01% and +33.51%, respectively, from the preceding year.
Investors should also take note of any recent adjustments to analyst estimates for Arista Networks. These revisions help to show the ever-changing nature of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Currently, Arista Networks is carrying a Zacks Rank of #2 (Buy).
From a valuation perspective, Arista Networks is currently exchanging hands at a Forward P/E ratio of 36.27. This indicates a premium in contrast to its industry's Forward P/E of 19.52.
It's also important to note that ANET currently trades at a PEG ratio of 1.83. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Communication - Components industry had an average PEG ratio of 1.83 as trading concluded yesterday.
The Communication - Components industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 153, positioning it in the bottom 40% 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.
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
