What to Expect From Arista Networks' Next Quarterly Earnings Report

Barchart · 10/18 09:58

California-based Arista Networks, Inc. (ANET) engages in the development, marketing, and sale of data-driven, client-to-cloud networking solutions for data center, campus, and routing environments. Valued at a market cap of $127.7 billion, the company serves various industries as well as government agencies and is expected to announce its fiscal Q3 earnings results after the market closes on Thursday, Nov. 7.

Ahead of this event, analysts expect the tech company to report a profit of $1.85 per share, up 13.5% from $1.63 per share in the year-ago quarter. The company has consistently beaten Wall Street's earnings estimates in the last four quarters. In Q2, the company’s adjusted EPS topped the consensus estimates and increased 32.9% from a year ago to $2.10, thanks to its robust demand trend and steady margin improvements.

For fiscal 2024, analysts expect ANET to report an EPS of $7.39, up 20.8% from $6.12 in fiscal 2023. Moreover, EPS is expected to grow 13.3% year-over-year to $8.37 in fiscal 2025.

Shares of ANET have rallied 73.9% on a YTD basis, significantly outpacing both the S&P 500 Index's ($SPX) 22.5% surge and the Technology Select Sector SPDR Fund’s (XLK) 20.3% return over the same period.

Surging demand for data center and cloud networking technologies and solid demand trends among enterprise customers, backed by ANET’s multi-domain modern software approach, have primarily contributed to its strong performance. Moreover, shares of ANET jumped 11.3% following its Q2 earnings release as along with its adjusted earnings, its revenue of $1.69 billion in the period, surpassed the Wall Street estimates of $1.64 billion and increased 15.9% from a year ago.

Analysts' consensus view on Arista Networks’ stock is cautiously optimistic, with a "Moderate Buy" rating overall. Among 22 analysts covering the stock, 14 recommend “Strong Buy," two suggest "Moderate Buy," five indicate “Hold,” and one recommends “Strong Sell.” As of writing, the stock is trading above its mean price target of $390.63.

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On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.