Arista Networks Stock Climbs After Strong Q1 Earnings, Upbeat Guidance

Arista Networks, Inc. ANET shares are trading higher Wednesday after the company posted strong first-quarter earnings and upbeat guidance.

The Details:

Arista Networks reported quarterly earnings of $1.99 per share which beat the analyst consensus estimate of $1.74 by 14.37%.

Quarterly sales came in at $1.571 billion which beat the analyst consensus estimate and represents a 16.28% increase over sales from the same period last year.

The company's board of directors authorized an additional $1.2 billion stock repurchase program. 

Arista sees second-quarter revenue in a range of $1.62 billion to $1.65 billion, versus the $1.62 billion estimate. 

“Arista is off to a strong start to 2024 with solid first quarter results,” said Jayshree Ullal, CEO of Arista Networks. “As we get ready to celebrate the 10th anniversary of our IPO in June, I am pleased with our progress in the Arista 2.0 journey as seen in breakthrough innovations, customer traction and building our next generation leaders.” 

UBS analyst David Vogt maintained Arista Networks with a Neutral rating and raised the price target from $275 to $285 following the print, and Needham reiterated its Buy rating and $320 price target.

Related News: Reddit Shares Soar On First Post-IPO Q1 Results, Strong Q2 Guidance

ANET Stock Prediction 2024:

Arista Networks’ revenue growth in fiscal year 2023 was 33.71%, reflecting the influence of various factors including the macroeconomic environment, demand for its products and services, and its position relative to competitors. This growth is a critical indicator for investors assessing the company’s future prospects.

Some macro factors that could impact the company's performance in the next year include higher interest rates, progress on reeling in inflation and labor market strength. The Fed's benchmark rate is currently at 5.33%, while PPI recently came in at 0.2%, growing 2.1% from last year. The unemployment rate was most recently reported as 3.9%.

An investor should pay attention to economic conditions to decide whether they think the macro environment is positive or negative for Arista Networks stock. For real time economic data and breaking market updates, check out Benzinga Pro. Try it for free.

How does this stack up against Arista Networks's peers?

Investors may also want to analyze a stock in comparison to companies with similar products or in similar industries. Arista Networks operates in the Information Technology sector. The stock has experienced average annual growth of 53.04% compared to the -9.54% average of its peer companies. This is above the broader sector movement of Arista Networks.

ANET Price Action: According to Benzinga Pro, Arista Networks shares are up 6.81% at $292.64 at the time of publication Wednesday.

Image: Courtesy of Arista Networks, Inc.