tiprankstipranks
Arista Spikes 11% As 3Q Sales Pace Past The Street
Market News

Arista Spikes 11% As 3Q Sales Pace Past The Street

Shares of Arista Networks soared 11% in Monday’s extended trading session after the computer networking solution provider reported better-than-expected 3Q results despite COVID-19 related supply-chain challenges.

Arista Networks’ (ANET) 3Q sales fell 7.5% year-over-year to $605 million but surpassed analysts’ expectations of $581.3 million and came well ahead of management’s guidance range of $570-$590 million. Adjusted EPS dropped 10% to $2.42 but surpassed the Street consensus of $2.21.

Arista CEO Jayshree Ullal said, “Our customers are validating our traction as we migrate from legacy to cognitive client to cloud deployments with a cumulative of 40 million cloud networking ports shipped by Q3 2020. Despite some COVID-19 turbulence, we believe Arista will only emerge stronger.” (See ANET stock analysis on TipRanks).

The company provided strong 4Q sales guidance that exceeds Wall Street forecasts. Arista projects 4Q revenues to generate between $615 million and $635 million, which is higher than Street estimates of $609.3 million.

Ahead of its earnings, Rosenblatt Securities analyst Ryan Koontz raised the stock’s price target to $250 (15.7% upside potential) from $240, while reiterating a Hold rating. In an October 19 earnings preview note, Koontz wrote, “We expect a strong Q3 from hyperscale and, despite a flattish trend into Q4, to return to y/y growth in 4Q20 vs an easy compare. Our checks indicate continued progress in enterprise including a number of F1000 logo wins. The recent run-up in ANET stock (+7% vs S&P over the past month) leaves some upside in our opinion.”

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 6 Buys and 10 Holds. The average price target of $240.75 implies upside potential of about 11.4% to current levels. Shares are up 6.3% year-to-date.

Related News:
Magellan Tops 3Q Profit As Refined Products Demand Improves
Twitter’s Ad Revenues Drive 3Q Sales Beat
Clorox Hikes 2021 Guidance Due To Cleaning Bonanza; Shares Rise 4%

Trending

Name
Price
Price Change
S&P 500
Dow Jones
Nasdaq 100
Bitcoin

Popular Articles