Arista Networks Sees Unusually High Options Volume (NYSE:ANET)

Key Points

• On Wednesday, Arista Networks saw a 96% increase in call options trading, with traders acquiring 61,335 call options compared to the usual daily volume of 31,365.
• CEO Jayshree Ullal sold 880,180 shares at an average price of $124.79, resulting in a 12.90% decrease in her ownership stake, while other insiders also sold shares recently.
• Arista Networks reported a 30.4% year-over-year increase in quarterly revenue, achieving $2.20 billion, and announced a stock repurchase plan of $1.50 billion, indicating management's belief in the stock's undervaluation.

Arista Networks, Inc. (NYSE:ANET - Get Free Report) was the recipient of unusually large options trading on Wednesday. Stock investors acquired 61,335 call options on the company. Thisrepresentsanincreaseof96% compared to the typical volume of 31,365 call options.

Insiders Place Their Bets

In other news, CEO Jayshree Ullal sold 880,180 shares of the stock in a transaction dated Thursday, July 31st. The shares were sold at an average price of $124.79, for a total transaction of $109,837,662.20. Following the transaction, the chief executive officer owned 5,944,405 shares of the company's stock, valued at $741,802,299.95. This represents a 12.90% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, Director Kelly Bodnar Battles sold 864 shares of the stock in a transaction dated Friday, July 25th. The stock was sold at an average price of $114.68, for a total transaction of $99,083.52. Following the transaction, the director directly owned 7,460 shares in the company, valued at $855,512.80. This trade represents a 10.38% decrease in their position. The disclosure for this sale can be found here. In the last 90 days, insiders have sold 3,443,742 shares of company stock valued at $395,523,885. 3.39% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently made changes to their positions in the company. HighMark Wealth Management LLC increased 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 acquiring an additional 230 shares during the last quarter. Quarry LP increased 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 acquiring an additional 206 shares during the last quarter. Dunhill Financial LLC increased 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 acquiring an additional 212 shares during the last quarter. Cloud Capital Management LLC bought a new position in Arista Networks in the first quarter valued at $30,000. Finally, Saudi Central Bank bought a new position in Arista Networks in the first quarter valued at $33,000. 82.47% of the stock is currently owned by hedge funds and other institutional investors.

Arista Networks Stock Performance

ANET stock traded up $0.69 during midday trading on Thursday, reaching $139.47. 2,802,040 shares of the company's stock traded hands, compared to its average volume of 10,641,529. The company has a 50-day moving average price of $103.49 and a two-hundred day moving average price of $95.28. Arista Networks has a 52 week low of $59.43 and a 52 week high of $141.01. The firm has a market capitalization of $175.17 billion, a PE ratio of 54.73, a price-to-earnings-growth ratio of 3.44 and a beta of 1.37.

Arista Networks (NYSE:ANET - Get Free Report) last issued its earnings results on Tuesday, August 5th. The technology company reported $0.73 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.65 by $0.08. Arista Networks had a net margin of 40.90% and a return on equity of 31.93%. The business had revenue of $2.20 billion for the quarter, compared to analysts' expectations of $2.11 billion. During the same quarter in the previous year, the firm posted $0.53 EPS. The business's revenue for the quarter was up 30.4% compared to the same quarter last year. As a group, analysts predict that Arista Networks will post 2.2 EPS for the current fiscal year.

Arista Networks declared that its board 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 generally a sign that the company's board of directors believes its shares are undervalued.

Analysts Set New Price Targets

Several equities analysts recently weighed in on ANET shares. Morgan Stanley raised their price target on shares of Arista Networks from $120.00 to $125.00 and gave the company an "overweight" rating in a research report on Wednesday. Wedbush started coverage on shares of Arista Networks in a research report on Wednesday, May 28th. They issued an "outperform" rating on the stock. Citigroup raised their price target on shares of Arista Networks from $123.00 to $136.00 and gave the company a "buy" rating in a research report on Wednesday. UBS Group lifted their target price on shares of Arista Networks from $115.00 to $155.00 and gave the stock a "buy" rating in a research report on Wednesday. Finally, KGI Securities cut shares of Arista Networks to a "neutral" rating in a research report on Wednesday, May 7th. Six equities research analysts have rated the stock with a hold rating and fourteen have assigned a buy rating to the company's stock. According to data from MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and a consensus target price of $138.07.

Arista Networks Company Profile

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.