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Will Healthy Top-Line Growth Buoy Arista (ANET) Q1 Earnings?
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Arista Networks, Inc. (ANET - Free Report) is scheduled to report first-quarter 2023 results on May 1, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 16.5%, with the bottom line surpassing the Zacks Consensus Estimate by 20 cents. Arista delivered a trailing four-quarter earnings surprise of 14.2%, on average.
The Santa Clara, CA-based cloud networking company is likely to have recorded higher revenues year over year, supported by healthy demand trends. With improved order visibility, the company is taking decisive steps to improve inventory levels and manufacturing capacity to negate supply-chain headwinds, which in turn is likely to buoy the bottom line.
Factors at Play
During the first quarter, Arista launched the WAN Routing System in a concerted effort to simplify and modernize the customer-wide area network by integrating three new network offerings. These are enterprise-class routing platforms, carrier/cloud-neutral Internet transit capabilities and the CloudVision Pathfinder Service.
It enables customers to deploy a consistent networking architecture across all enterprise network domains from the client to campus to the data center to multi-cloud, offering an ideal solution across a blend of edge, campus, data center, cloud and SaaS environments. This software-driven, data-centric approach is likely to fuel its growth in data-driven cloud networking business with proactive platforms and predictive operations. These are likely to have translated into incremental revenues in the quarter.
The company also introduced low power 800G optical transceivers that utilize advanced silicon technology nodes and 400G Bi-directional transceivers that interoperate with the large installed base of 100G-BIDI transceivers and the newly defined SR1.2 and SR4.2 standards. In addition to compatibility with existing networks, the products offer interoperability across cloud, service providers and enterprise networks. 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 March quarter, the Zacks Consensus Estimate for revenues is pegged at $1,306 million, indicating an increase from the year-ago quarter’s reported figure of $877 million. Management expects revenues of $1,275-$1,325 million. Adjusted earnings per share are pegged at $1.35, which suggests an improvement from 84 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 0.00%, with both pegged at $1.35. 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 Model N, Inc. is +7.14% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on May 9.
The Earnings ESP for Keysight Technologies, Inc. (KEYS - Free Report) is +1.29% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on May 16.
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Will Healthy Top-Line Growth Buoy Arista (ANET) Q1 Earnings?
Arista Networks, Inc. (ANET - Free Report) is scheduled to report first-quarter 2023 results on May 1, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 16.5%, with the bottom line surpassing the Zacks Consensus Estimate by 20 cents. Arista delivered a trailing four-quarter earnings surprise of 14.2%, on average.
The Santa Clara, CA-based cloud networking company is likely to have recorded higher revenues year over year, supported by healthy demand trends. With improved order visibility, the company is taking decisive steps to improve inventory levels and manufacturing capacity to negate supply-chain headwinds, which in turn is likely to buoy the bottom line.
Factors at Play
During the first quarter, Arista launched the WAN Routing System in a concerted effort to simplify and modernize the customer-wide area network by integrating three new network offerings. These are enterprise-class routing platforms, carrier/cloud-neutral Internet transit capabilities and the CloudVision Pathfinder Service.
It enables customers to deploy a consistent networking architecture across all enterprise network domains from the client to campus to the data center to multi-cloud, offering an ideal solution across a blend of edge, campus, data center, cloud and SaaS environments. This software-driven, data-centric approach is likely to fuel its growth in data-driven cloud networking business with proactive platforms and predictive operations. These are likely to have translated into incremental revenues in the quarter.
The company also introduced low power 800G optical transceivers that utilize advanced silicon technology nodes and 400G Bi-directional transceivers that interoperate with the large installed base of 100G-BIDI transceivers and the newly defined SR1.2 and SR4.2 standards. In addition to compatibility with existing networks, the products offer interoperability across cloud, service providers and enterprise networks. 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 March quarter, the Zacks Consensus Estimate for revenues is pegged at $1,306 million, indicating an increase from the year-ago quarter’s reported figure of $877 million. Management expects revenues of $1,275-$1,325 million. Adjusted earnings per share are pegged at $1.35, which suggests an improvement from 84 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 0.00%, with both pegged at $1.35. 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:
Skyworks Solutions, Inc. (SWKS - Free Report) is set to release quarterly numbers on May 8. It has an Earnings ESP of +0.15% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Model N, Inc. is +7.14% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on May 9.
The Earnings ESP for Keysight Technologies, Inc. (KEYS - Free Report) is +1.29% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on May 16.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.