Arista Networks (ANET) Moves 8.7% Higher: Will This Strength Last?

Arista Networks (ANET) shares rallied 8.7% in the last trading session to close at $138.41. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 2.7% loss over the past four weeks.

Arista continues to benefit from the expanding cloud networking market, which is driven by the strong demand for scalable infrastructure. In addition to high capacity and easy availability, its cloud networking solutions promise predictable performance along with programmability that enables integration with third-party applications for network management, automation and orchestration. The company’s product portfolio facilitates the implementation of high performance, highly scalable and appropriate solutions for every environment.

It offers one of the broadest range of datacenter and campus Gigabit Ethernet switches (1/2.5/5/10/25/40/50/100/400) and routers in the industry. Arista provides routing and switching platforms with industry-leading capacity, low latency, port density and power efficiency. The company also continues to innovate in areas such as deep packet buffers, embedded optics and reversible cooling. Such a comprehensive portfolio augurs well for its long-term growth. Arista is witnessing solid demand among enterprise customers backed by its multi-domain modern software approach, which is built upon its unique and differentiating foundation, the single EOS (Extensible Operating System) and CloudVision stack.

This cloud networking company is expected to post quarterly earnings of $0.75 per share in its upcoming report, which represents a year-over-year change of +15.4%. Revenues are expected to be $2.37 billion, up 22.7% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Arista Networks, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on ANET going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Arista Networks is part of the Zacks Internet - Software industry. Procore Technologies (PCOR), another stock in the same industry, closed the last trading session 3.3% higher at $65.01. PCOR has returned -15.2% in the past month.

For Procore Technologies, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.35. This represents a change of +3400% from what the company reported a year ago. Procore Technologies currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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