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Arista Networks (ANET) Gains But Lags Market: What You Should Know

Zacks Equity Research

In the latest trading session, Arista Networks (ANET) closed at $202.47, marking a +1.44% move from the previous day. This move lagged the S&P 500's daily gain of 3.43%. At the same time, the Dow added 3.29%, and the tech-heavy Nasdaq gained 4.26%.

Prior to today's trading, shares of the cloud networking company had lost 16.29% over the past month. This has lagged the Computer and Technology sector's loss of 12.03% and the S&P 500's loss of 12.15% in that time.

Wall Street will be looking for positivity from ANET as it approaches its next earnings report date. This is expected to be February 21, 2019. On that day, ANET is projected to report earnings of $2.04 per share, which would represent year-over-year growth of 19.3%. Our most recent consensus estimate is calling for quarterly revenue of $589.69 million, up 26.04% from the year-ago period.

Investors might also notice recent changes to analyst estimates for ANET. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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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.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. ANET is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, ANET currently has a Forward P/E ratio of 22.99. This valuation marks a premium compared to its industry's average Forward P/E of 18.14.

Also, we should mention that ANET has a PEG ratio of 1.06. 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. Communication - Components stocks are, on average, holding a PEG ratio of 1.55 based on yesterday's closing prices.

The Communication - Components industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 79, which puts it in the top 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

To follow ANET in the coming trading sessions, be sure to utilize Zacks.com.


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