Arista Networks (ANET) Outperforms Broader Market: What You Need to Know

In the latest market close, Arista Networks (ANET) reached $254.77, with a +1.43% movement compared to the previous day. The stock outpaced the S&P 500's daily gain of 0.02%. Elsewhere, the Dow lost 0.11%, while the tech-heavy Nasdaq added 0.1%.

The the stock of cloud networking company has fallen by 15.66% in the past month, lagging the Computer and Technology sector's loss of 5.13% and the S&P 500's loss of 3.01%.

The investment community will be closely monitoring the performance of Arista Networks in its forthcoming earnings report. The company is scheduled to release its earnings on May 7, 2024. It is anticipated that the company will report an EPS of $1.74, marking a 21.68% rise compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $1.55 billion, reflecting a 14.48% rise from the equivalent quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $7.49 per share and revenue of $6.55 billion, indicating changes of +7.93% and +11.78%, respectively, compared to the previous year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Arista Networks. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.37% higher within the past month. Arista Networks is currently a Zacks Rank #1 (Strong Buy).

In the context of valuation, Arista Networks is at present trading with a Forward P/E ratio of 33.55. For comparison, its industry has an average Forward P/E of 16.82, which means Arista Networks is trading at a premium to the group.

It's also important to note that ANET currently trades at a PEG ratio of 1.92. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Communication - Components industry currently had an average PEG ratio of 1.37 as of yesterday's close.

The Communication - Components industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 44, positioning it in the top 18% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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