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Arista Networks, Inc. Just Recorded A 24% EPS Beat: Here's What Analysts Are Forecasting Next
As you might know, Arista Networks, Inc. (NYSE:ANET) just kicked off its latest third-quarter results with some very strong numbers. The company beat forecasts, with revenue of US$3.7b, some 9.7% above estimates, and statutory earnings per share (EPS) coming in at US$1.22, 24% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Arista Networks' 23 analysts is for revenues of US$18.5b in 2027. This reflects a substantial 56% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 46% to US$5.49. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$16.4b and earnings per share (EPS) of US$4.90 in 2027. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.
See our latest analysis for Arista Networks
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$250, suggesting that the forecast performance does not have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Arista Networks, with the most bullish analyst valuing it at US$291 and the most bearish at US$205 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Arista Networks shareholders.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Arista Networks' rate of growth is expected to accelerate meaningfully, with the forecast 43% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 26% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Arista Networks to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Arista Networks following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$250, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Arista Networks. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Arista Networks going out to 2028, and you can see them free on our platform here..
Even so, be aware that Arista Networks is showing 1 warning sign in our investment analysis , you should know about...
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