Stock of the Day

March 8, 2022

Arista Networks (ANET)

$98.31
-$5.10 (-4.9%)
Market Cap: $130.40B

About Arista Networks

Arista Networks, Inc. engages in the development, marketing, and sale of data-driven, client to cloud networking solutions for data center, campus, and routing environments in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. Its cloud networking solutions consist of Extensible Operating System (EOS), a publish-subscribe state-sharing networking operating system offered in combination with a set of network applications. The company offers data center and cloud networking systems, including newer artificial intelligence (AI) ethernet switching platforms; campus wired and wireless products, and routing systems addressing Core Routing, Edge Routing, Data Center Interconnect (DCI), Multi-cloud and Wide Area Networking (WAN) use cases; and a suite of value-add software solutions that leverage EOS to provide end-to-end orchestration, automation, analytics, network monitoring, and security. It also provides post contract customer support services, such as technical support, hardware repair and replacement parts beyond standard warranty, bug fixes, patches, and upgrade services. The company serves a range of industries comprising internet companies, service providers, financial services organizations, government agencies, media and entertainment companies, telecommunication service providers, and others. It markets and sells its products through distributors, system integrators, value-added resellers, and original equipment manufacturer partners, as well as through its direct sales force. The company was formerly known as Arastra, Inc. and changed its name to Arista Networks, Inc. in October 2008. Arista Networks, Inc. was incorporated in 2004 and is headquartered in Santa Clara, California.

Arista Networks Bull Case

Here are some ways that investors could benefit from investing in Arista Networks, Inc.:

  • Recent upgrades from multiple analysts, including a target price increase from Citigroup to $121.00 and from Evercore ISI to $130.00, indicate strong market confidence in the stock's potential for growth.
  • The stock currently trades at $103.82, which is significantly below the average target price of $113.79, suggesting potential for price appreciation.
  • Arista Networks, Inc. has demonstrated strong financial performance, with a recent quarterly revenue of $1.93 billion, surpassing estimates, and a net margin of 40.29%, indicating efficient operations and profitability.
  • Institutional interest is high, with 82.47% of the stock owned by institutional investors and hedge funds, reflecting confidence from large financial entities in the company's future prospects.
  • The company has a solid return on equity of 30.52%, which indicates effective management and the ability to generate profits from shareholders' equity.

Arista Networks Bear Case

Investors should be bearish about investing in Arista Networks, Inc. for these reasons:

  • Despite positive analyst ratings, one analyst has issued a "sell" rating with a target price of $80.00, suggesting that there are differing opinions on the stock's future performance.
  • Insider selling has been notable, with significant shares sold by executives, which could indicate a lack of confidence in the stock's short-term performance.
  • The stock has a high P/E ratio of 49.91, which may suggest that it is overvalued compared to its earnings, potentially leading to a price correction.
  • Recent fluctuations in stock price, with a one-year low of $60.08 and a high of $133.57, indicate volatility that could pose risks for investors looking for stability.
  • The company's beta of 1.09 suggests that the stock is slightly more volatile than the market, which could lead to larger price swings and increased risk for investors.

Recent News