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

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In the latest trading session, Arista Networks (ANET - Free Report) closed at $118.94, marking a +1.05% move from the previous day. This change outpaced the S&P 500's 0.57% gain on the day. Meanwhile, the Dow gained 0.7%, and the Nasdaq, a tech-heavy index, lost 0.11%.

Prior to today's trading, shares of the cloud networking company had lost 14.96% over the past month. This has lagged the Computer and Technology sector's loss of 11.12% and the S&P 500's loss of 5.26% in that time.

Arista Networks will be looking to display strength as it nears its next earnings release, which is expected to be May 2, 2022. The company is expected to report EPS of $0.81, up 28.57% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $854.01 million, up 27.93% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.69 per share and revenue of $3.84 billion, which would represent changes of +28.57% and +30.41%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Arista Networks. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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 remained stagnant. Arista Networks currently has a Zacks Rank of #3 (Hold).

Digging into valuation, Arista Networks currently has a Forward P/E ratio of 31.93. This represents a premium compared to its industry's average Forward P/E of 16.75.

Investors should also note that ANET has a PEG ratio of 2.08 right now. 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. ANET's industry had an average PEG ratio of 1.6 as of yesterday's close.

The Communication - Components industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 94, putting it in the top 38% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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