Arista Networks (ANET) closed the most recent trading day at $149.50, moving +2.75% from the previous trading session. This change outpaced the S&P 500’s 0.37% gain on the day. Elsewhere, the Dow saw a downswing of 0.14%, while the tech-heavy Nasdaq appreciated by 0.71%.
The cloud networking company’s stock has climbed by 1.86% in the past month, falling short of the Computer and Technology sector’s gain of 8.04% and the S&P 500’s gain of 4.26%.
Analysts and investors alike will be keeping a close eye on the performance of Arista Networks in its upcoming earnings disclosure. The company is expected to report EPS of $0.72, up 20% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.26 billion, up 24.73% from the year-ago period.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $2.81 per share and revenue of $8.78 billion. These totals would mark changes of +23.79% and +25.39%, respectively, from last year.
Investors should also pay attention to any latest changes in analyst estimates for Arista Networks. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we’ve formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Arista Networks is holding a Zacks Rank of #1 (Strong Buy) right now.
Digging into valuation, Arista Networks currently has a Forward P/E ratio of 51.72. This represents a premium compared to its industry average Forward P/E of 30.03.
We can also see that ANET currently has a PEG ratio of 2.76. 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. Internet – Software stocks are, on average, holding a PEG ratio of 2.3 based on yesterday’s closing prices.
The Internet – Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 63, positioning it in the top 26% of all 250+ industries.
