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

Arista Networks (ANET) closed at $121.77 in the latest trading session, marking a -0.64% move from the prior day. This change lagged the S&P 500’s 0.1% gain on the day. Elsewhere, the Dow gained 0.28%, while the tech-heavy Nasdaq lost 0.09%.

Coming into today, shares of the cloud networking company had lost 8.96% in the past month. In that same time, the Computer and Technology sector lost 5.51%, while the S&P 500 lost 3.6%.

Investors will be hoping for strength from Arista Networks as it approaches its next earnings release. On that day, Arista Networks is projected to report earnings of $1.21 per share, which would represent year-over-year growth of 47.56%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.19 billion, up 44.88% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.37 per share and revenue of $4.3 billion, which would represent changes of +52.26% and +45.87%, respectively, from the prior year.

Any recent changes to analyst estimates for Arista Networks should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.02% higher. Arista Networks is currently a Zacks Rank #1 (Strong Buy).

In terms of valuation, Arista Networks is currently trading at a Forward P/E ratio of 28.02. This represents a premium compared to its industry’s average Forward P/E of 22.4.

Meanwhile, ANET’s PEG ratio is currently 1.6. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. Communication – Components stocks are, on average, holding a PEG ratio of 1.54 based on yesterday’s closing prices.

The Communication – Components industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 27, putting it in the top 11% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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