Arista Networks (ANET) ended the recent trading session at $139.39, demonstrating a -8.92% change from the preceding day's closing price. The stock's change was less than the S&P 500's daily loss of 0.05%. Elsewhere, the Dow lost 0.59%, while the tech-heavy Nasdaq added 0.45%.
The stock of cloud networking company has risen by 12.13% in the past month, leading the Computer and Technology sector's gain of 5.42% and the S&P 500's gain of 3.44%.
Investors will be eagerly watching for the performance of Arista Networks in its upcoming earnings disclosure. The company is predicted to post an EPS of $0.71, indicating a 18.33% growth compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $2.26 billion, indicating a 24.73% increase compared to the same quarter of the previous year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $2.81 per share and a revenue of $8.73 billion, representing changes of +23.79% and +24.64%, respectively, from the prior year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Arista Networks. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Right now, Arista Networks possesses a Zacks Rank of #2 (Buy).
In terms of valuation, Arista Networks is currently trading at a Forward P/E ratio of 54.4. For comparison, its industry has an average Forward P/E of 32, which means Arista Networks is trading at a premium to the group.
Investors should also note that ANET has a PEG ratio of 3.27 right now. 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. The Internet - Software was holding an average PEG ratio of 2.25 at yesterday's closing price.
The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 68, positioning it in the top 28% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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Arista Networks, Inc. (ANET): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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