Arista Networks (ANET) closed at $120.19 in the last trading session, marking a +1.93% move from the previous day. The stock lagged the S&P 500 daily gain of 2.44%. Meanwhile, the Dow Jones gained 1.65% and the tech-heavy Nasdaq gained 0.28%.
As of today, shares of the cloud networking company have lost 17.63% over the past month. Meanwhile, the IT & Technology sector lost 16.14%, while the S&P 500 lost 9.65%.
Arista Networks will be looking to show strength ahead of its next earnings release, which is expected to be February 14, 2022. On that day, Arista Networks is expected to report earnings of $0.74 per share, which would represent year to year. growth of 19.35%. Meanwhile, our latest consensus estimate calls for revenue of $790.58 million, up 21.91% from the prior year quarter.
Investors should also note any recent changes to analyst estimates for Arista Networks. These revisions generally reflect the latest short-term trading trends, which may change frequently. Therefore, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Based on our research, we believe that these estimate revisions are directly related to the team’s close stock movements. Investors can take advantage of this by using the Zacks ranking. This model accounts for these estimation changes and provides a simple and actionable scoring system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven track record of outperformance, with #1 stocks returning an average of +25% per year since 1988. In the past 30 days, our consensus EPS projection has increased by 0.18%. Arista Networks currently has a Zacks rank of #3 (Hold).
As for its valuation, Arista Networks holds a Forward P/E ratio of 33.43. For comparison, its industry has an average Forward P/E of 17.96, meaning Arista Networks is trading at a premium to the group.
Investors should also note that ANET has a PEG ratio of 2 at this time. The PEG ratio is similar to the widely used P/E ratio, but this measure also takes into account the company’s expected earnings growth rate. Communication – Component stocks maintain an average PEG ratio of 1.55 based on yesterday’s closing prices.
The Communication – Components industry is part of the IT and Technology sector. This group has a Zacks industry ranking of 102, which places it in the top 40% of over 250 industries.
The Zacks Industry Rankings are ranked from best to worst in terms of the average Zacks Ranking of individual companies in each of these industries. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.
To follow ANET in future trading sessions, be sure to use Zacks.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.