Arista Networks Stock Forecast:
According to 14 analysts, the average target price for Arista Networks stock over the next 12 months is USD 178.56, and the average analyst rating is Strong Buy. Stock Target Advisor‘s analysis is Slightly Bullish, based on 9 positive and 5 negative signals. Arista Networks’ stock price closed at USD 136.00, representing an increase of 4.87% over the past week, 18.26% over the past month, and 12.47% over the past year.
Analysts Coverage Change:
- Wells Fargo & Company: Maintains “Overweight” rating on Arista Networks (ANET:NYE), target price raised from USD 160 to USD 170.
- Barclays: Maintains “Overweight” rating, target price raised from USD 165 to USD 177.
- JMP Securities: Maintains “Market Outperform” rating, target price raised from USD 135 to USD 165.
- Cowen: Maintains “Outperform” rating, target price raised from USD 212 to USD 225.
- Credit Suisse Group: Maintains “Neutral” rating, target price raised from USD 140 to USD 146.
- Needham & Company: Maintains “Buy” rating, target price raised from USD 155 to USD 165.
- Morgan Stanley & Co.: Maintains “Equal-Weight” ratings, target price raised from USD 130 to USD 140.
Arista Networks News:
Arista Networks (ANET:NYE) released their fourth-quarter earnings report, which exceeded the predictions of analysts and created high expectations for ANET stock. The report was released after the market closed on Monday. During the three-month period ending on December 31st, Arista’s earnings increased by 72% to $1.41 per share, surpassing the estimated value of $1.21 per share. The revenue rose by 55% to $1.275 billion compared to the estimated revenue of $1.2 billion. Arista is a manufacturer of cloud computing network equipment. In the previous year, their earnings were 82 cents per share, and the revenue was $824 million.
Positive Fundamentals:
Arista Networks is a large entity in its sector with a high market capitalization, which makes it more stable. The company has delivered superior return on equity, invested capital, and assets in the past four quarters compared to its peers, placing it in the top quartile. Additionally, the company has positive total cash flow and free cash flow in the past four quarters. Over the previous five years, Arista Networks has also shown top quartile earnings and revenue growth compared to its sector. Moreover, the company’s Gross Profit to Asset Ratio is in the top quartile compared to its peers, which is a popular measure among value investors for showing superior long-term returns. Overall, these factors indicate that Arista Networks is a strong company that may be a good investment opportunity.
Negative Fundamentals:
Arista Networks stock is considered risky due to its high volatility and the total returns have been volatile and above the median for its sector over the past 5 years. Additionally, the stock is overpriced compared to its peers on various measures including price to earnings, price to book value, price to cash flow, and price to free cash flow basis. This suggests that the stock is expensive relative to its financial performance and may not offer a good value proposition for investors. Therefore, investors should exercise caution before investing in the stock and carefully evaluate their risk tolerance.
FA Score (Fundamental Analysis):
The fundamental analysis of Arista Networks is “Slightly Bullish” with a FA score of 6.4 out of 10, where 0 is very bearish and 10 is very bullish.
About Arista Networks:
Arista Networks, Inc. is a company that creates and sells cloud networking solutions worldwide, including extensible operating systems, network applications, and gigabit Ethernet switching and routing platforms. They also offer post-contract customer support services such as technical support and hardware repair. Their customers come from a variety of industries, including internet, financial services, government agencies, media, and entertainment. Arista Networks, Inc. sells its products through various channels including distributors, system integrators, value-added resellers, and direct sales. The company was previously called Arastra, Inc. before changing its name to Arista Networks, Inc. in 2008, and it is headquartered in Santa Clara, California.
