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Will Healthy Revenue Growth Buoy Arista (ANET) Q4 Earnings?
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Arista Networks, Inc. (ANET - Free Report) is scheduled to report fourth-quarter 2022 results on Feb 13, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 19.1%, with the bottom line surpassing the Zacks Consensus Estimate by 20 cents. Arista delivered a trailing four-quarter earnings surprise of 12.7%, on average.
The Santa Clara, CA-based cloud networking company is likely to have recorded higher revenues year over year, supported by overall healthy demand. However, due to COVID-19 adversities, Arista is likely to have experienced some supply-chain issues resulting in extended lead time and constrained shipments.
Factors at Play
During the fourth quarter, Arista expanded its widely deployed 7050X4 Series switches, providing higher density and less power consumption at a lower cost/Gbit. Complementing the new 7050X4 Series, it also extended the portfolio of 7060X5 Series switches with the addition of 800G to address the high-end storage and high-performance computing requirements as well as future generations of server connectivity of large-scale cloud networks. These are likely to have translated into incremental revenues in the quarter.
The company introduced a comprehensive network automation solution with the Arista Continuous Integration (CI) Pipeline. Built on Arista's EOS Network Data Lake, the Arista CI Pipeline helps enterprise customers adopt a modern network operating model to help deliver an agile, data-driven change management process for the network. This, in turn, enables faster and more reliable deployment with reduced operational time and expense. The move is likely to have contributed to top-line growth in the quarter.
Management expects continued growth within Enterprise customers with strength in adjacencies, software and services. For the December quarter, the Zacks Consensus Estimate for revenues is pegged at $1,196 million, indicating a 45.1% increase from the year-ago quarter’s reported figure. Management expects revenues of $1,175-$1,200 million. Adjusted earnings per share are pegged at $1.21, which suggests an improvement from 82 cents recorded in the year-earlier quarter.
Earnings Whispers
Our proven model does not predict an earnings beat for Arista this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -2.54%, with the former pegged at $1.18 and the latter at $1.21. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
The Earnings ESP for Applied Materials, Inc. (AMAT - Free Report) is +0.42% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Feb 16.
The Earnings ESP for Cambium Networks Corporation (CMBM - Free Report) is +9.27% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Feb 16.
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Will Healthy Revenue Growth Buoy Arista (ANET) Q4 Earnings?
Arista Networks, Inc. (ANET - Free Report) is scheduled to report fourth-quarter 2022 results on Feb 13, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 19.1%, with the bottom line surpassing the Zacks Consensus Estimate by 20 cents. Arista delivered a trailing four-quarter earnings surprise of 12.7%, on average.
The Santa Clara, CA-based cloud networking company is likely to have recorded higher revenues year over year, supported by overall healthy demand. However, due to COVID-19 adversities, Arista is likely to have experienced some supply-chain issues resulting in extended lead time and constrained shipments.
Factors at Play
During the fourth quarter, Arista expanded its widely deployed 7050X4 Series switches, providing higher density and less power consumption at a lower cost/Gbit. Complementing the new 7050X4 Series, it also extended the portfolio of 7060X5 Series switches with the addition of 800G to address the high-end storage and high-performance computing requirements as well as future generations of server connectivity of large-scale cloud networks. These are likely to have translated into incremental revenues in the quarter.
The company introduced a comprehensive network automation solution with the Arista Continuous Integration (CI) Pipeline. Built on Arista's EOS Network Data Lake, the Arista CI Pipeline helps enterprise customers adopt a modern network operating model to help deliver an agile, data-driven change management process for the network. This, in turn, enables faster and more reliable deployment with reduced operational time and expense. The move is likely to have contributed to top-line growth in the quarter.
Management expects continued growth within Enterprise customers with strength in adjacencies, software and services. For the December quarter, the Zacks Consensus Estimate for revenues is pegged at $1,196 million, indicating a 45.1% increase from the year-ago quarter’s reported figure. Management expects revenues of $1,175-$1,200 million. Adjusted earnings per share are pegged at $1.21, which suggests an improvement from 82 cents recorded in the year-earlier quarter.
Earnings Whispers
Our proven model does not predict an earnings beat for Arista this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -2.54%, with the former pegged at $1.18 and the latter at $1.21. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Arista Networks, Inc. Price and EPS Surprise
Arista Networks, Inc. price-eps-surprise | Arista Networks, Inc. Quote
Zacks Rank: Arista currently has a Zacks Rank #2.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Check Point Software Technologies Ltd. (CHKP - Free Report) is set to release quarterly numbers on Feb 13. It has an Earnings ESP of +1.22% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Applied Materials, Inc. (AMAT - Free Report) is +0.42% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Feb 16.
The Earnings ESP for Cambium Networks Corporation (CMBM - Free Report) is +9.27% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Feb 16.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.