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Chicago, IL – August 14, 2025 – Zacks Equity Research shares Arista Networks ANET as the Bull of the Day and Lucky Strike Entertainment LUCK as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Rocket Companies RKT, Pulte Home PHM and Lennar LEN.
Here is a synopsis of all five stocks:
Arista Networks, a Zacks Rank #1 (Strong Buy), builds high-performance networking gear and software for the world's biggest data centers, cloud providers, and enterprises.
The stock surged to fresh all-time highs after strong earnings, as both analysts and investors see the momentum carrying through year-end.
The Santa Clara, California–based company has been an innovator in networking standards, co-authoring the VXLAN protocol (a key technology for virtualized and multi-tenant data centers) and expanding it into advanced routing and integration capabilities. Its bread and butter is ultra-fast Ethernet switches and routers, which are designed for modern workloads like AI, big data, and large-scale cloud computing.
Its customers span five main verticals: cloud titans (hyperscalers with over a million servers), cloud specialists, service providers, financial services, and the broader enterprise sector. That includes six of the world's largest cloud providers. Arista sells through a mix of direct sales, resellers, system integrators, and OEM partners, and it backs its gear with comprehensive support, upgrades, and repair services.
ANET is valued at $177 billion and has a Forward PE of 50. The stock has Zacks Style Scores of "B" in Growth and Momentum, but a "F" in Value.
Arista Networks delivered a strong Q2, beating earnings expectations by 12%. EPS came in at $0.73 beating the $0.65, while revenue was $2.20 billion, topping expectations of $2.11 billion.
Non-GAAP gross margin rose to 65.6% from 65.4% a year ago, and operating margin expanded to 48.4% from 46.5%, marking the company's first quarter with more than $1 billion in non-GAAP operating income.
Management cited broad-based momentum across AI, cloud, and enterprise markets, with record enterprise and campus demand in a $25–30 billion TAM and renewed cloud upgrades driven by AI-fueled traffic diversity.
Arista raised its FY25 revenue forecast to $8.75 billion, up 25% year-over-year and $550 million above its prior outlook, and expects AI networking revenue to exceed $1.5 billion next year. The company also sees back-end AI networking reaching $750 million in 2025, up from near zero in 2022, with full AI strategy details coming at September's Analyst Day.
Management reaffirmed its Arista 2.0 roadmap to hit $10 billion in revenue by 2026, two years ahead of schedule, driven by customer adoption, product innovation, and operational discipline.
Since the company reported earnings, analysts have been raising estimates across the board.
For the current quarter, numbers have been taken from $0.66 to $0.71 over the last 7 days, or 8%. For the current year, analysts have lifted estimates 6%, going from $2.64 to $2.81.
Looking at next year, the trend continues. Over the last month analysts have lifted their numbers from $2.94 to $3.18, or 8%.
With those estimates going higher, many analysts are lifting their targets:
-Barclays reiterated ANET with Underweight, but lifted their target to $151 from $119.
-Goldman Sachs reiterated ANET with Buy, putting their price target at $155, up from $115.
-JPMorgan Chase reiterated ANET as an Overweight with a price target of $150, up from $130.
The stock just hit all-time highs after earnings and is starting to slide a bit. Investors should be watching for support levels as there are Fibonacci 161.8% extension targets at $185.
Let us look at some moving averages for possible entry points:
21-day moving average: $122.20
50-day MA: $108.50
200-day MA: $100
With record earnings momentum, rising analyst estimates, and a leadership position in high-speed networking for AI and cloud, Arista is showing no signs of slowing down.
The company's ambitious roadmap, expanding TAM, and accelerating demand from both hyperscalers and enterprises make ANET a compelling growth story into 2025 and beyond.
For investors looking for exposure to the infrastructure backbone of AI and cloud computing, this Zacks Rank #1 stock may have plenty of runway left.
Lucky Strike Entertainment, currently a Zacks Rank #5 (Strong Sell), operates a network of location-based entertainment venues focused on bowling.
The stock has traded sideways for the last few years and is off its recent lows after earnings. However, there seems to be no upside momentum after a recent earnings miss and falling estimates.
Founded in 1997 and headquartered in Mechanicsville, Virginia, the company was formerly known as Bowlero Corp. before rebranding to Lucky Strike Entertainment in December 2024.
Its portfolio includes well-known brands such as AMF, Bowlero, Lucky Strike, Boomers, and the Professional Bowlers Association (PBA). The company's properties feature bowling, arcade-style amusements, water parks, and family entertainment centers. Founded in 1997 and headquartered in Mechanicsville, Virginia, the company was formerly known as Bowlero Corp. before rebranding to Lucky Strike Entertainment in December 2024.
The company has a market cap of $1.4B and the stock pays a dividend of 2.2%. The stock holds Zacks Style Scores of "B" Value and "C" in both Growth and Momentum.
Lucky Strike's latest results landed well below expectations, missing the Zacks consensus EPS estimate by 69% and reflecting broad-based weakness in the business.
Q3 net income fell to $13.3 million from $23.8 million a year ago, while revenue declined to $339.9 million from $358 million expected. Adjusted EBITDA also slipped year over year, and same-store revenue fell 5.6%.
The company withdrew its full-year guidance, citing economic uncertainty. Management called out softness in the corporate events segment as a major drag, even as retail, leagues, and food sales showed some resilience.
With same-store sales slipping, corporate bookings under pressure, and management is leaning into cost discipline rather than growth. Even so, Lucky Strike faces a tough road to winning back momentum, especially if macro headwinds persist.
Earnings estimates have shown limited movement since management suspended guidance, but the bias remains negative.
For the next quarter, the consensus loss estimate has inched lower to -$0.16 from -$0.15 over the past 90 days. Expectations for next year have taken a sharper hit, dropping 66% to just $0.01 from $0.03.
While projections for the current year have ticked slightly higher, the overall trend points to caution. Many investors may stay on the sidelines until there is a clearer, sustained turnaround in the outlook.
Not much to read from the chart outside that the stock is going from the upper left to the lower right. This is not the direction the bulls want and to change momentum they will have to sustain price over the 200-day MA at $10.20.
An attempt was made in late July, but the stock failed to hold the gains.
With guidance pulled, earnings estimates drifting lower, and the chart stuck in a long-term downtrend, Lucky Strike Entertainment is struggling to spark investor enthusiasm.
Operational challenges in key markets and a lack of upside momentum after the latest earnings miss point to continued headwinds. Until the company can deliver consistent growth in both results and expectations, LUCK may remain a tough bet for bullish investors.
Market participants continue to ride the narrative that interest rate cuts will be coming down, and perhaps faster than we had initially thought. Recall not long ago, a plurality of analysts were considering zero rate cuts for 2025. Now we're up to 2-3 again (it had been 5-6 at the start of the year), and at least one might be a 50 basis-point (bps) cut, not 25 bps.
This would presumably bring down mortgage rates as well, which is why we're seeing mortgage lenders like Rocket Companies up another +7.4% Wednesday. Homebuilders Pulte Home and Lennar were both +5% yesterday as well. Clearly, there is a lot of pent-up interest in seeing this new interest rate environment transpire. This is before mentioning the small-cap Russell 2000 being up +4.3% over the past two sessions alone; lower interest rates would be a boon for the small banks and insurance companies listed here, too.
The Dow gathered another +463 points Wednesday, +1.09%, while the Russell 2000 led all major indexes for a second straight session, +1.98%. The S&P 500 and Nasdaq closed with lower increases — +0.32% and +0.14%, respectively — but nevertheless closed at new all-time index highs. Heady times for the market — and in August, no less!
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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This article originally published on Zacks Investment Research (zacks.com).
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