Will Top-Line Growth Drive Arista's (ANET) Q1 Earnings?
Zacks Investment Research | Apr 29, 2019 10:04PM ET
Arista Networks, Inc. (NYSE:ANET) is scheduled to report first-quarter 2019 results after the closing bell on May 2. In the last reported quarter, the company delivered a positive earnings surprise of 10.3%. Notably, Arista surpassed the Zacks Consensus Estimate for earnings in each of the last four quarters, the average beat being 11.4%.
For the first quarter, the company is likely to report higher consolidated revenues on a year-over-year basis driven by healthy growth dynamics. Whether this could result in an earnings beat remains to be seen.
Factors to Consider
Arista continues to benefit from the expanding cloud networking market owing to strong demand for scalable infrastructure. In addition to high capacity and easy availability, its cloud networking solutions promise predictable performance along with programmability that enables integration with third-party applications for network management, automation and orchestration. The company’s product portfolio facilitates the implementation of high-performance, highly scalable and appropriate solutions for every environment. These positives are expected to benefit its upcoming results.
During the first quarter, Arista launched the 7130L Series, an enhanced ultra-low latency and high-precision network application platform, for better configurability. The product is optimized for a range of its network applications and can be leveraged to run third-party partner applications. Notably, the 7130L Series integrates field-programmable gate array-based network applications, MetaMux and MetaWatch, for combining time-stamped packets for data analysis. It makes custom applications easy to deploy. We believe that such innovative product offerings will further expand its market share, and augment revenues.
With solid organic growth driven by continued strength in demand curve, Arista is likely to record healthy rise in revenues. The company expects first-quarter revenues in the range of $588 million to $598 million. The Zacks Consensus Estimate for the same is pegged at $594 million. In the year-earlier quarter, the company generated revenues of $472 million.
Earnings Whispers
Our proven model does not show that Arista is likely to beat earnings this quarter as it does not possess the key components. A stock needs to have both a positive Earnings ESP Filter .
Arista Networks, Inc. Price and EPS Surprise
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