Arista Networks: Positive Long-Term Outlook Keeps Me Bullish

Nov. 22, 2022 11:45 PM ETArista Networks, Inc. (ANET)9 Comments

Summary

  • Arista Networks recently reported a strong Q3 with revenue and operating margin coming in nicely above expectations.
  • The company also hosted an investor day where they provided long-term financial targets, including revenue growing at ~25% CAGR.
  • While valuation remains at a premium, the company's faster revenue growth and strong margin profile demand a higher valuation multiple.

Arista Networks (previously Arastra) headquarters located in Silicon Valley

Sundry Photography

Arista Networks (NYSE:ANET) reported a better-than-expected Q3, with revenue coming in around 10% above expectations and operating margin expanding nicely, despite ongoing pressure on gross margin. Q4 guidance was also stronger than expected, which was encouraging given the ongoing difficult macroeconomic

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Q3 Financials

Arista Networks

Q4 Guidance

Arista Network

Financial Targets

Arista Networks

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This article was written by

Individual investor with hands-on experience in the equity markets. Largely focusing on Tech companies or major mispricings in the market.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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