What's Driving The Action In Arista Networks Stock?

Arista Networks Inc ANET shares are trading higher Tuesday after the networking equipment company reported better-than-expected financial results. Several analysts raised price targets on the stock following the print.

What Happened: Arista Networks said second-quarter revenue increased 38.7% year-over-year to $1.459 billion, which beat the consensus estimate of $1.38 billion, according to Benzinga Pro. The company reported quarterly earnings of $1.58 per share, which beat analyst estimates of $1.44 per share. 

The gross margin came in at 61.3%, down from 61.9% on a year-over-year basis, but up from 60.3% sequentially. Arista said it surpassed 75 million cloud network ports shipped cumulatively during the quarter. 

"In spite of the return to shorter lead times and reduced visibility, we are executing well with gradual incremental improvements to our 2023 outlook, which now calls for year-over-year growth in excess of 30%," said Ita Brennan, CFO of Arista Networks.

Arista sees third-quarter revenue in the range of $1.45 billion to $1.5 billion. The company anticipates gross margin of approximately 62% in the third quarter.

See Also: What's Going On With Western Digital Stock?

Analyst Assessment:

• Keybanc analyst Thomas Blakey maintained Arista Networks with an Overweight and raised the price target from $206 to $217.
• Piper Sandler analyst James Fish maintained Arista Networks with an Overweight and raised the price target from $166 to $190.
• Barclays analyst Tim Long maintained Arista Networks with an Overweight and raised the price target from $179 to $200.
• Wells Fargo analyst Aaron Rakers maintained Arista Networks with an Overweight and raised the price target from $200 to $225.
• Goldman Sachs analyst Mike Burton maintained Arista Networks with a Buy and raised the price target from $193 to $215.

ANET Price Action: Arista Networks shares were up 15.5% at $179.12 at the time of writing, according to Benzinga Pro.

Photo: Jean Martinelle from Pixabay.