Tuesday's IBD 50 Stocks To Watch pick, Arista Networks, is breaking out above a new buy point during today's stock market rally. ANET shares rallied nearly 2% midday Tuesday, trading in the 5% buy area.
Stocks To Buy And Watch: Arista Networks
Santa Clara, Calif.-based Arista Networks sells computer networking gear built into giant data centers that transfer internet content to mobile phones and personal computers.
Arista — a rival of Cisco Systems — reported strong quarterly earnings on Feb. 14. Earnings jumped 32% year over year to 82 cents per share on revenue of $824.5 million, up 27% vs. the year-ago period. Revenue guidance for the current quarter also topped expectations.
"We've registered a record number of million-dollar customers as a direct result of our momentum in the enterprise and campus traction that we have experienced throughout the year. We have now surpassed in excess of 8,000 cumulative customers," said Chief Executive Officer Jayshree Ullal in the conference call.
Ullal continued, "Microsoft was the only greater-than-10% customer at a 15% contribution. We do expect Meta, formerly Facebook, to become our second 10% revenue customer in 2022 as we improve lead times."
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Arista's IBD Stock Ratings
Arista Networks ranks No. 22 in the IBD 50. The computer-generated list of leading growth stocks highlights companies with strong relative price strength and top-notch fundamentals.
ANET shows a solid 92 out of 99 Earnings Per Share Rating with a best-possible A SMR Rating, according to IBD Stock Checkup. The EPS Rating tracks a company's short- and long-term earnings performance. The SMR Rating analyzes a company's sales, margins and return on equity, and offers a letter grade from A (the best) to E (the worst).
IBD Stock Checkup also shows that ANET stock has a 97 out of a maximum 99 IBD Composite Rating.
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ANET Stock Is Breaking Out Today
Also part of IBD Leaderboard, Arista Networks is breaking out past a double bottom's 133.97 buy point, according to IBD MarketSmith chart analysis. The 5% buy area tops out at 140.67.
ANET shares rallied almost 2% Tuesday afternoon, on pace to extend a win streak to six sessions. Per Leaderboard commentary, Arista Networks cleared an aggressive entry near 127 and joined the Leaders as a quarter-size position.
Bullishly, the stock's relative strength line is just shy of a new high. The RS line measures the stock's price performance vs. the S&P 500.
The 12-week base undercut a prior flat base that formed in November and December. That resets the base count, which refreshes Arista's chart and boost the new breakout's chances of success.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the stock market.
