Arista Networks, Inc. (NYSE:ANET) experienced a share price decline of 1.7% on November 4, 2023, following a downgrade from Erste Group Bank. The stock fell to a low of $132.41 before closing at $134.8750. During the trading session, approximately 6,995,694 shares changed hands, reflecting a significant decrease of 30% compared to the average daily volume of 10,017,454 shares. The previous close for the stock was $137.26.
Multiple brokerages recently issued reports affecting Arista Networks’ market outlook. On September 25, BNP Paribas Exane upgraded the stock from a “neutral” rating to an “outperform” rating, setting a price target of $172.00. Similarly, Melius Research increased its target price from $160.00 to $185.00 with a “buy” rating in a report dated September 12. On October 10, Morgan Stanley assigned a target price of $171.00 and gave the stock an “overweight” rating. UBS Group also revised its price target from $115.00 to $155.00, maintaining a “buy” rating.
As of now, eighteen equity research analysts rate Arista Networks with a “buy” rating, while five analysts have given it a “hold” rating. According to MarketBeat.com, the average rating stands at “Moderate Buy” with a consensus target price of $164.31.
Insider Transactions and Institutional Investments
In related news, insider trading activities have been notable. Director Charles H. Giancarlo sold 8,000 shares on November 3 at an average price of $157.12, totaling approximately $1.26 million. Post-sale, Giancarlo holds 33,784 shares valued at around $5.31 million, marking a decrease of 19.15% in his position. Another insider, Kenneth Duda, sold 30,000 shares on October 17 for about $4.28 million, resulting in a 69.81% reduction in his shareholding, which now stands at 12,976 shares valued at approximately $1.85 million. In total, insiders have sold 2,009,040 shares worth $294.37 million over the last quarter, with insiders now owning 3.39% of the company.
Institutional investors also play a significant role in Arista Networks’ stock dynamics. Vanguard Group Inc. raised its stake by 1.0% in the third quarter, now owning over 100 million shares valued at approximately $14.57 billion. Cresset Asset Management LLC increased its holdings by 1.0% in the second quarter, while Geode Capital Management LLC raised its position by 0.5%. Furthermore, AllianceBernstein L.P. expanded its stake by 9.0% in the first quarter. Currently, around 82.47% of Arista Networks’ stock is held by institutional investors and hedge funds.
Financial Performance and Market Outlook
Arista Networks reported its quarterly earnings on November 4, revealing earnings per share (EPS) of $0.75, surpassing analysts’ expectations of $0.72 by $0.03. The company generated revenue of $2.31 billion for the quarter, exceeding the anticipated $2.26 billion. Year-on-year, Arista’s revenue increased by 27.5%, with the previous year’s EPS recorded at $2.40. The company’s return on equity stood at 31.05% with a net margin of 40.90%.
Looking ahead, Arista Networks has set guidance for Q4 2025, with analysts predicting an EPS of $2.20 for the current fiscal year. The firm’s current market capitalization is approximately $169.85 billion, with a price-to-earnings ratio of 53.05 and a beta of 1.48.
Arista Networks continues to engage in the development and sale of innovative networking solutions across various sectors, maintaining its presence in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific region. As the company navigates through market fluctuations, its strategic initiatives and institutional support will be crucial in determining its trajectory in the upcoming quarters.