Stock of the Day

March 8, 2022

Arista Networks (ANET)

$95.11
+$0.17 (+0.2%)
Market Cap: $119.45B

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. The company offers data center and cloud networking systems, including newer artificial intelligence (AI) ethernet switching platforms; campus wired and wireless products, and routing systems addressing Core Routing, Edge Routing, Data Center Interconnect (DCI), Multi-cloud and Wide Area Networking (WAN) use cases; and a suite of value-add software solutions that leverage EOS to provide end-to-end orchestration, automation, analytics, network monitoring, and security. It also provides post contract customer support services, such as technical support, hardware repair and replacement parts beyond standard warranty, bug fixes, patches, and upgrade services. The company serves a range of industries comprising internet companies, service providers, financial services organizations, government agencies, media and entertainment companies, telecommunication service providers, and others. It markets and sells its products through distributors, system integrators, value-added resellers, and original equipment manufacturer partners, as well as through its direct sales force. The company was formerly known as Arastra, Inc. and changed its name to Arista Networks, Inc. in October 2008. Arista Networks, Inc. was incorporated in 2004 and is headquartered in Santa Clara, California.

Arista Networks Bull Case

Here are some ways that investors could benefit from investing in Arista Networks, Inc.:

  • The current stock price is around $86.49, which may be seen as an attractive entry point for investors looking for potential growth.
  • Arista Networks, Inc. has received multiple upgrades from analysts, indicating strong market confidence, with a consensus rating of "Moderate Buy" and an average price target of approximately $107.47.
  • The company has initiated a share repurchase program, allowing it to buy back up to 1.3% of its shares, which often signals that management believes the stock is undervalued.
  • Recent analyst reports highlight a positive outlook, with several firms setting price targets above the current stock price, suggesting potential for appreciation.
  • Arista Networks, Inc. operates in the growing sector of data-driven networking solutions, which positions it well for future demand in data centers and cloud environments.

Arista Networks Bear Case

Investors should be bearish about investing in Arista Networks, Inc. for these reasons:

  • Insider selling has been significant, with executives selling over 237,000 shares recently, which may raise concerns about their confidence in the company's future performance.
  • Despite positive analyst ratings, the stock has experienced volatility, with a 1-year high of $133.58 and a low of $59.43, indicating potential risks for investors.
  • Some analysts have lowered their price targets, which could suggest a more cautious outlook on the stock's near-term performance.
  • The technology sector can be highly competitive and subject to rapid changes, which may pose risks to Arista Networks, Inc.'s market position and profitability.
  • The company's price-to-earnings ratio is relatively high, which could indicate that the stock is overvalued compared to its earnings, making it a riskier investment.
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