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Arista Networks, Inc. (ANET), headquartered in Santa Clara, California, develops, markets, and sells data-driven client-to-cloud networking solutions for data center, campus, and routing environments. Valued at $106 billion by market cap, the leading tech company offers ethernet switches, pass-through cards, transceivers, and enhanced operating systems. It also provides host adapter solutions and networking services.
Shares of this cloud networking giant have outperformed the broader market considerably over the past year. ANET has gained a whopping 93.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 19.7%. In 2024 alone, ANET stock is up 43.7%, surpassing SPX’s 12.1% rise on a YTD basis.
Zooming in further, ANET has also outpaced the Fidelity Disruptive Communications ETF (FDCF). The exchange-traded fund has gained about 28.8% over the past year. Moreover, ANET’s robust gains on a YTD basis outshine the ETF’s 13.1% returns over the same time frame.
ANET’s overall performance can be attributed to robust demand and innovative product launches. Steady customer additions and margin improvement supported the company’s top-line expansion and earnings growth. Besides, the launch of Etherlink AI platforms, multi-domain segmentation for Zero Trust Networking, and collaboration with NVIDIA Corporation (NVDA) highlight ANET’s commitment to cutting-edge solutions.
On Jul. 30, ANET shares closed down more than 2% after reporting its Q2 results. Its adjusted EPS of $2.10 and revenue of $1.69 billion surpassed Wall Street expectations of $1.94 and $1.64 billion, respectively. For Q3, ANET expects revenue to be between $1.72 billion and $1.75 billion. Its non-GAAP gross margin is expected to be between 63% and 64%, and its non-GAAP operating margin is expected to be 44%.
For the current fiscal year, ending in December, analysts expect ANET’s EPS to grow 20.6% to $7.38 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 23 analysts covering ANET stock, the consensus is a “Moderate Buy.” That’s based on 15 “Strong Buy” ratings, two “Moderate Buys,” five “Holds,” and one “Strong Sell.”
On Jul. 31, Evercore ISI analyst Amit Daryanani maintained a “Buy” rating on ANET with a price target of $400.
The mean price target of $356.65 represents a 5.4% premium to ANET’s current price levels. The Street-high price target of $432 suggests an upside potential of 27.7%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
