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Based in Santa Clara, California, Arista Networks, Inc. (ANET) specializes in data-driven networking solutions spanning data centers, campuses, and routing environments. Boasting a market cap of $124.5 billion, this leading tech company offers Ethernet switches, pass-through cards, transceivers, advanced operating systems, host adapter solutions, and a range of networking services.
Shares of this cloud networking titan have outperformed the broader market considerably over the past year. ANET has gained a whopping 79.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 32.3%. In 2024 alone, ANET stock is up 63.9%, surpassing SPX’s 24.7% rise on a YTD basis.
Zooming in further, ANET has also outpaced the First Trust Cloud Computing ETF (SKYY). The exchange-traded fund has gained about 48.3% over the past year. Moreover, ANET’s robust gains on a YTD basis outshine the ETF’s 34.8% returns over the same time frame.
On Nov. 7, Arista Networks reported its Q3 earnings, and its shares closed down more than 7% in the following trading session due to forecasting fiscal 2025 revenue growth of 15% to 17%, weaker than the consensus of 18%. It reported adjusted earnings of $2.40 per share, surpassing the $2.09 expected by analysts. Revenue reached $1.81 billion, beating forecasts of $1.76 billion. For Q4, the company projects revenue between $1.85 billion and $1.9 billion.
For the current fiscal year, ending in December, analysts expect ANET’s EPS to grow 26.6% to $7.75 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 19 analysts covering ANET stock, the consensus is a “Moderate Buy.” That’s based on 13 “Strong Buy” ratings, one “Moderate Buys,” four “Holds,” and one “Strong Sell.”
This consensus rating is less bullish than three months ago when 14 analysts gave the stock a “Strong Buy.”
On Nov. 8, Barclays PLC (BCS) raised Arista Networks' price target from $341 to $495, reaffirming an Overweight rating. While Arista's guidance for next year projects 15%-17% growth, slightly below expectations, Barclays views this as a conservative outlook. The firm is optimistic about Arista’s expanding role in artificial intelligence and its growing market share in campus and routing sectors.
The mean price target of $432.41 represents a 12% premium to ANET’s current price levels. The Street-high price target of $500 suggests an upside potential of 29.6%.
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