Yahoo Finance Interested In Arista Networks Inc (NYSE:ANET)? Here’s What Its Recent Performance Looks Like
Examining how Arista Networks Inc (NYSE:ANET) is performing as a company requires looking at more than just a years’ earnings. Below, I will run you through a simple sense check to build perspective on how Arista Networks is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its communications industry peers. See our latest analysis for Arista Networks
Did ANET’s recent earnings growth beat the long-term trend and the industry?
I like to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method enables me to assess various companies in a uniform manner using the most relevant data points. For Arista Networks, its most recent trailing-twelve-month earnings is US$484.16M, which, against the prior year’s level, has rocketed up by more than double. Given that these values are fairly nearsighted, I have estimated an annualized five-year value for Arista Networks’s earnings, which stands at US$146.44M This shows that, on average, Arista Networks has been able to increasingly raise its earnings over the past few years as well.
What’s enabled this growth? Let’s see if it is merely attributable to industry tailwinds, or if Arista Networks has experienced some company-specific growth. Over the past couple of years, Arista Networks increased its bottom line faster than revenue by effectively controlling its costs. This brought about a margin expansion and profitability over time. Scanning growth from a sector-level, the US communications industry has been growing its average earnings by double-digit 13.80% over the past twelve months, and a less exciting 6.64% over the last five years. This suggests that any uplift the industry is gaining from, Arista Networks is able to amplify this to its advantage.
What does this mean?
Arista Networks’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Arista Networks gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Arista Networks to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for ANET’s future growth? Take a look at our free research report of analyst consensus for ANET’s outlook.
Financial Health: Is ANET’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
