Ahead of its big IPO, ISI has started coverage of Arista Networks (ANET) with a Strong Buy and $60 PT.
Arista recently set a $36-$40 price range for its IPO; that implies a valuation range of $2.3B-$2.56B, or 6.4x-7.1x 2013 sales. ISI's target would spell a $3.83B valuation.
Arista, which has scored a blue-chip customer list for its high-density/low-latency Ethernet switches (and become a thorn in Cisco's side), had Q1 revenue of $117.2M (+91% Y/Y), and net income of $6.8M. The rev. growth rate represents a slight pickup from 2013's 87% clip.
The company is looking to raise $189M-$210M by selling 5.25M shares. Co-founders David Cheriton and Andy Bechtolsheim are set to own over 42% of shares post-IPO.
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