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Arista Networks (NYSE:ANET) is 3% larger as analysts weigh in on the corporate’s record-revenue quarter, the place gross sales jumped 57% year-over-year.
That inventory transfer larger bought some new juice late Tuesday morning as BofA gave the inventory a double improve, to Purchase from Underperform.
The financial institution’s Tal Liani had downgraded Arista just a few months in the past on considerations about basic spending, however has reversed course after “sturdy 3Q22 outcomes, strong Cloud Titan spending initiatives, and evaluation of the 2023 earnings energy.”
The Cloud Titans vertical is now anticipated to make up about 45% of complete fiscal 2022 income, up from about 30% final 12 months, Liani notes. Whereas the vertical is predicted to develop 119% in 2022, “commentary of key cloud gamers factors to continued infrastructure spending, and that is additionally mirrored in Juniper’s (JNPR) commentary.”
In the meantime, the transfer larger may be a bit muted as all eyes are on Arista’s Investor Day approaching Thursday. Traders are “largely trying by” Monday’s print to no matter outlook comes on Thursday, Morgan Stanley’s Meta Marshall stated. She’s a bit cautious on the “dependence on outsized progress” in Cloud Titans, and is Equal Weight with a value goal of $115 (8% beneath present pricing).
Cowen is extra bullish, elevating its value goal to $203, implying 63% upside. Regardless of ongoing provide chain affect, the magnitude of income and earnings per share upside stands out from opponents, analyst Paul Silverstein says.
Citi’s Jim Suva additionally has a Purchase ranking, noting Arista is clearly taking share from rival Cisco Methods (CSCO), and he is anticipating Thursday to convey steering for gross sales progress within the mid-teens (and expects 2023 might convey higher progress than that).
For extra, dig into Arista’s earnings name presentation and In search of Alpha’s transcript of the corporate’s earnings name.
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