Arista Networks (NYSE:ANET) Trading 17.5% Higher Following Better-Than-Expected Earnings

Key Points

• Arista Networks' share price soared 17.5% to $138.80 after reporting better-than-expected earnings, with an EPS of $0.73 exceeding analysts' estimates of $0.65.
• The company announced a $1.50 billion share repurchase plan, signaling that its board believes the stock is undervalued.
• Analysts have recently raised their price targets for Arista Networks, with a consensus rating of "Moderate Buy" and an average price target of $123.64.

Arista Networks, Inc. (NYSE:ANET - Get Free Report)'s share price shot up 17.5% during mid-day trading on Wednesday following a better than expected earnings announcement. The stock traded as high as $139.02 and last traded at $138.80. 12,813,825 shares were traded during trading, an increase of 21% from the average session volume of 10,601,340 shares. The stock had previously closed at $118.12.

The technology company reported $0.73 EPS for the quarter, beating analysts' consensus estimates of $0.65 by $0.08. The firm had revenue of $2.20 billion for the quarter, compared to analyst estimates of $2.11 billion. Arista Networks had a net margin of 40.72% and a return on equity of 30.48%. The company's revenue for the quarter was up 30.4% compared to the same quarter last year. During the same period in the previous year, the business earned $0.53 earnings per share.

Arista Networks declared that its Board of Directors has approved a share repurchase plan on Tuesday, May 6th that permits the company to buyback $1.50 billion in shares. This buyback authorization permits the technology company to repurchase up to 1.3% of its stock through open market purchases. Stock buyback plans are often a sign that the company's board of directors believes its stock is undervalued.

Analysts Set New Price Targets

A number of brokerages have recently weighed in on ANET. Citigroup lifted their price target on Arista Networks from $112.00 to $123.00 and gave the company a "buy" rating in a report on Friday, July 11th. Redburn Atlantic started coverage on Arista Networks in a research note on Wednesday, May 28th. They issued a "buy" rating and a $112.00 target price on the stock. Barclays decreased their target price on shares of Arista Networks from $126.00 to $119.00 and set an "overweight" rating for the company in a research note on Thursday, May 8th. Wolfe Research initiated coverage on shares of Arista Networks in a report on Tuesday, July 8th. They set an "outperform" rating on the stock. Finally, Morgan Stanley increased their target price on Arista Networks from $100.00 to $120.00 and gave the company an "overweight" rating in a report on Thursday, July 31st. Six research analysts have rated the stock with a hold rating and fourteen have assigned a buy rating to the stock. According to MarketBeat.com, Arista Networks currently has a consensus rating of "Moderate Buy" and an average price target of $123.64.

Insider Transactions at Arista Networks

In other news, Director Charles H. Giancarlo sold 8,000 shares of the firm's stock in a transaction on Friday, August 1st. The stock was sold at an average price of $117.01, for a total transaction of $936,080.00. Following the completion of the sale, the director directly owned 57,784 shares of the company's stock, valued at $6,761,305.84. This trade represents a 12.16% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available through the SEC website. Also, CEO Jayshree Ullal sold 880,180 shares of the business's stock in a transaction that occurred on Thursday, July 31st. The stock was sold at an average price of $124.79, for a total value of $109,837,662.20. Following the completion of the sale, the chief executive officer owned 5,944,405 shares of the company's stock, valued at $741,802,299.95. The trade was a 12.90% decrease in their position. The disclosure for this sale can be found here. Over the last quarter, insiders sold 3,443,742 shares of company stock valued at $395,523,885. 3.54% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently bought and sold shares of the stock. DSG Capital Advisors LLC acquired a new stake in shares of Arista Networks during the 4th quarter valued at $5,984,000. Ibex Wealth Advisors grew its holdings in shares of Arista Networks by 14.4% in the 1st quarter. Ibex Wealth Advisors now owns 58,093 shares of the technology company's stock valued at $4,501,000 after acquiring an additional 7,329 shares in the last quarter. Sowell Financial Services LLC acquired a new stake in shares of Arista Networks in the first quarter valued at approximately $629,000. Commonwealth Equity Services LLC grew its stake in shares of Arista Networks by 19.8% in the first quarter. Commonwealth Equity Services LLC now owns 613,309 shares of the technology company's stock worth $47,519,000 after purchasing an additional 101,162 shares during the last quarter. Finally, Bank of Montreal Can boosted its position in shares of Arista Networks by 275.3% during the 4th quarter. Bank of Montreal Can now owns 1,490,700 shares of the technology company's stock worth $164,767,000 after purchasing an additional 1,093,472 shares in the last quarter. 82.47% of the stock is owned by institutional investors and hedge funds.

Arista Networks Stock Performance

The company's 50 day simple moving average is $102.57 and its 200 day simple moving average is $94.98. The stock has a market cap of $174.22 billion, a PE ratio of 58.75, a price-to-earnings-growth ratio of 3.50 and a beta of 1.37.

About Arista Networks

Arista Networks, Inc engages in the development, marketing, and sale of data-driven, client to cloud networking solutions for data center, campus, and routing environments in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. Its cloud networking solutions consist of Extensible Operating System (EOS), a publish-subscribe state-sharing networking operating system offered in combination with a set of network applications.

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