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Arista Networks (ANET) Stock Sinks As Market Gains: What You Should Know

Arista Networks (ANET) closed at $221.24 in the latest trading session, marking a -0.72% move from the prior day. This move lagged the S&P 500's daily gain of 0.22%. At the same time, the Dow added 0.59%, and the tech-heavy Nasdaq gained 0.16%.

Coming into today, shares of the cloud networking company had gained 5.07% in the past month. In that same time, the Computer and Technology sector lost 0.37%, while the S&P 500 gained 0.49%.

Investors will be hoping for strength from ANET as it approaches its next earnings release, which is expected to be February 21, 2019. The company is expected to report EPS of $2.04, up 19.3% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $588.75 million, up 25.84% from the year-ago period.

Any recent changes to analyst estimates for ANET should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. ANET currently has a Zacks Rank of #3 (Hold).

In terms of valuation, ANET is currently trading at a Forward P/E ratio of 25.64. For comparison, its industry has an average Forward P/E of 19.44, which means ANET is trading at a premium to the group.

Meanwhile, ANET's PEG ratio is currently 1.2. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Communication - Components industry currently had an average PEG ratio of 1.64 as of yesterday's close.

The Communication - Components industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 83, putting it in the top 33% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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