Arista Networks (NYSE:ANET) Trading Up 1.2% - Still a Buy?

Key Points

• Arista Networks' stock price increased by 1.2%, closing at $138.15, with a significant decline in trading volume compared to its average.
• Analysts have generally upgraded their expectations for Arista, with price targets ranging from $130 to $151, and a consensus rating of "Moderate Buy".
• The company reported a 30.4% increase in revenue year-over-year and topped earnings expectations with an EPS of $0.73 for the recent quarter.

Arista Networks, Inc. (NYSE:ANET - Get Free Report)'s stock price was up 1.2% on Friday . The company traded as high as $138.20 and last traded at $138.15. Approximately 2,196,607 shares were traded during mid-day trading, a decline of 79% from the average daily volume of 10,568,614 shares. The stock had previously closed at $136.48.

Wall Street Analyst Weigh In

A number of analysts have weighed in on ANET shares. JPMorgan Chase & Co. upped their price target on Arista Networks from $130.00 to $150.00 and gave the company an "overweight" rating in a research report on Wednesday, August 6th. Erste Group Bank upgraded Arista Networks from a "hold" rating to a "buy" rating in a report on Wednesday, July 23rd. Redburn Atlantic initiated coverage on Arista Networks in a report on Wednesday, May 28th. They set a "buy" rating and a $112.00 target price on the stock. KGI Securities cut Arista Networks to a "neutral" rating in a report on Wednesday, May 7th. Finally, Barclays restated an "overweight" rating and set a $151.00 target price (up previously from $119.00) on shares of Arista Networks in a report on Thursday, August 7th. Six research analysts have rated the stock with a hold rating and fourteen have given a buy rating to the company. According to data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and an average price target of $138.07.

Arista Networks Price Performance

The company has a market cap of $171.41 billion, a price-to-earnings ratio of 53.66, a price-to-earnings-growth ratio of 3.24 and a beta of 1.37. The stock has a 50-day moving average price of $109.18 and a 200 day moving average price of $95.98.

Arista Networks (NYSE:ANET - Get Free Report) last released its quarterly earnings results on Tuesday, August 5th. The technology company reported $0.73 EPS for the quarter, topping analysts' consensus estimates of $0.65 by $0.08. The company had revenue of $2.20 billion for the quarter, compared to analyst estimates of $2.11 billion. Arista Networks had a return on equity of 31.05% and a net margin of 40.90%. Arista Networks's revenue was up 30.4% compared to the same quarter last year. During the same quarter last year, the firm posted $0.53 earnings per share. Sell-side analysts expect that Arista Networks, Inc. will post 2.2 EPS for the current fiscal year.

Arista Networks announced that its board has approved a share buyback program on Tuesday, May 6th that allows the company to buyback $1.50 billion in outstanding shares. This buyback authorization allows the technology company to reacquire up to 1.3% of its shares through open market purchases. Shares buyback programs are usually an indication that the company's board of directors believes its stock is undervalued.

Insider Activity at Arista Networks

In related news, CEO Jayshree Ullal sold 192,979 shares of Arista Networks stock in a transaction that occurred on Friday, August 8th. The stock was sold at an average price of $139.67, for a total value of $26,953,376.93. Following the sale, the chief executive officer owned 5,623,721 shares of the company's stock, valued at approximately $785,465,112.07. This trade represents a 3.32% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, Director Kelly Bodnar Battles sold 864 shares of Arista Networks stock in a transaction that occurred on Friday, July 25th. The shares were sold at an average price of $114.68, for a total value of $99,083.52. Following the completion of the sale, the director directly owned 7,460 shares in the company, valued at approximately $855,512.80. This represents a 10.38% decrease in their position. The disclosure for this sale can be found here. In the last quarter, insiders have sold 5,767,742 shares of company stock valued at $714,048,068. 3.39% of the stock is owned by insiders.

Institutional Investors Weigh In On Arista Networks

A number of hedge funds and other institutional investors have recently bought and sold shares of ANET. Bare Financial Services Inc grew its stake in Arista Networks by 2,118.2% in the second quarter. Bare Financial Services Inc now owns 244 shares of the technology company's stock valued at $25,000 after purchasing an additional 233 shares in the last quarter. HighMark Wealth Management LLC grew its stake in Arista Networks by 179.7% in the first quarter. HighMark Wealth Management LLC now owns 358 shares of the technology company's stock valued at $28,000 after purchasing an additional 230 shares in the last quarter. Quarry LP grew its stake in Arista Networks by 381.5% in the fourth quarter. Quarry LP now owns 260 shares of the technology company's stock valued at $29,000 after purchasing an additional 206 shares in the last quarter. Dunhill Financial LLC grew its stake in Arista Networks by 415.7% in the fourth quarter. Dunhill Financial LLC now owns 263 shares of the technology company's stock valued at $29,000 after purchasing an additional 212 shares in the last quarter. Finally, Cloud Capital Management LLC bought a new position in Arista Networks in the first quarter valued at approximately $30,000. Institutional investors and hedge funds own 82.47% of the company's stock.

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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