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

Arista Networks (ANET) closed at $217.96 in the latest trading session, marking a +0.47% move from the prior day. This change outpaced the S&P 500's 0.45% gain on the day. Meanwhile, the Dow gained 0.51%, and the Nasdaq, a tech-heavy index, added 0.42%.

Coming into today, shares of the cloud networking company had lost 6.48% in the past month. In that same time, the Computer and Technology sector lost 0.69%, while the S&P 500 lost 1.64%.

ANET will be looking to display strength as it nears its next earnings release, which 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 $588.75 million, up 25.84% from the year-ago period.

Any recent changes to analyst estimates for ANET should also be noted by investors. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 currently has a Zacks Rank of #3 (Hold).

In terms of valuation, ANET is currently trading at a Forward P/E ratio of 24.96. For comparison, its industry has an average Forward P/E of 18.63, which means ANET is trading at a premium to the group.

It is also worth noting that ANET currently has a PEG ratio of 1.17. 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. The Communication - Components industry currently had an average PEG ratio of 1.61 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 95, putting it in the top 38% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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