In the latest close session, Arista Networks (ANET) was down 1.01% at $142.64. The stock's performance was behind the S&P 500's daily loss of 0.29%. At the same time, the Dow lost 0.37%, and the tech-heavy Nasdaq lost 0.34%.
The stock of cloud networking company has risen by 7.31% in the past month, lagging the Computer and Technology sector's gain of 8.98% and overreaching the S&P 500's gain of 3.08%.
The investment community will be closely monitoring the performance of Arista Networks in its forthcoming earnings report. The company is predicted to post an EPS of $0.72, indicating a 20% growth compared to the equivalent quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $2.26 billion, up 24.73% from the prior-year quarter.
For the full year, the Zacks Consensus Estimates project earnings of $2.81 per share and a revenue of $8.78 billion, demonstrating changes of +23.79% and +25.39%, respectively, from the preceding year.
It is also important to note the recent changes to analyst estimates for Arista Networks. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. As of now, Arista Networks holds a Zacks Rank of #1 (Strong Buy).
With respect to valuation, Arista Networks is currently being traded at a Forward P/E ratio of 51.22. This denotes a premium relative to the industry average Forward P/E of 31.03.
Also, we should mention that ANET has a PEG ratio of 2.73. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Internet - Software stocks are, on average, holding a PEG ratio of 2.29 based on yesterday's closing prices.
The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 76, this industry ranks in the top 31% of all industries, numbering over 250.
The Zacks Industry Rank gauges the strength of our 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.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding 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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