Arista Networks (ANET) Stock Sinks As Market Gains: What You Should Know

Arista Networks (ANET) closed at $239.37 in the latest trading session, marking a -1.98% move from the prior day. This change lagged the S&P 500's 0.22% gain on the day. Meanwhile, the Dow gained 0.49%, and the Nasdaq, a tech-heavy index, lost 0.15%.

Heading into today, shares of the cloud networking company had gained 4.77% over the past month, outpacing the Computer and Technology sector's loss of 2.32% and the S&P 500's loss of 0.57% in that time.

Investors will be hoping for strength from ANET as it approaches its next earnings release, which is expected to be February 21, 2019. The company is expected to report EPS of $2.04, up 19.3% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $589.69 million, up 26.04% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.73 per share and revenue of $2.14 billion. These totals would mark changes of +37.79% and +29.93%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for ANET. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 6.36% higher. ANET is holding a Zacks Rank of #1 (Strong Buy) right now.

Investors should also note ANET's current valuation metrics, including its Forward P/E ratio of 31.59. This valuation marks a premium compared to its industry's average Forward P/E of 18.91.

Investors should also note that ANET has a PEG ratio of 1.48 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ANET's industry had an average PEG ratio of 1.62 as of yesterday's close.

The Communication - Components industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 63, putting it in the top 25% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ANET in the coming trading sessions, be sure to utilize Zacks.com.

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