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Investing.com - Rosenblatt has raised its price target on Arista Networks (NYSE:ANET) to $140.00 from its previous target while maintaining a Neutral rating on the stock. The company, currently valued at $192.35 billion, is trading near its 52-week high of $156.32. According to InvestingPro analysis, the stock appears to be trading above its Fair Value, with multiple indicators suggesting elevated valuations.
The price target increase follows Arista’s Analyst Day, where the company presented its strategy for maintaining leadership in the 100G and above Ethernet Networking market. Rosenblatt noted that Arista’s differentiation appears to be shifting from operating system capabilities to cloud integration, telemetry, automation, network diagnostics, and power savings strategies, particularly as AI data centers emerge. The company’s strong market position is reflected in its impressive 90.7% price return over the past six months, though InvestingPro data indicates the stock may be in overbought territory.
Arista provided forward-looking guidance, projecting revenue growth of 25% in 2025 and 20% in 2026, followed by a mid-teens CAGR for 2026-2029. The company expects its AI Data Center and Campus segments, representing approximately 25% of its business, to expand by about 70%, while the remaining 75% of sales remain relatively flat. This projection aligns with the company’s current performance, as it maintains a healthy 64.24% gross profit margin and has demonstrated strong revenue growth of 25.97% over the last twelve months. For deeper insights into Arista’s financial health and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.
On margins, Arista guided for gross margins to potentially decrease from 63-64% in 2025 to 62-64% in 2026, and to 60-64% beyond 2026. This reduction reflects the faster growth in AI Data Center business, where Cloud Titans receive more favorable pricing, along with expectations that operating expenses will grow significantly faster than sales in 2026. The stock currently trades at a P/E ratio of 59.74, reflecting the market’s high growth expectations.
Rosenblatt has increased its 2025 revenue forecast for Arista to $10.5 billion from $10.1 billion, while maintaining its earnings per share estimate at approximately $3.10. The firm has also introduced 2027 projections of $12.2 billion in revenue and $3.50 in earnings per share, with the new price target based on 40 times 2027 earnings.
In other recent news, Arista Networks has been the focus of multiple analyst firms, each raising their price targets for the company. Piper Sandler increased its price target to $143 from $89, maintaining a Neutral rating, following Arista’s second-quarter results that surpassed expectations with over 50% growth in product billings. KeyBanc also raised its price target to $145 from $115, citing strong demand for artificial intelligence and expanding opportunities in various markets. Wolfe Research set a new price target at $185, up from $160, and maintained an Outperform rating, emphasizing Arista’s role in enhancing data center efficiency, particularly in AI networking environments. BofA Securities and Goldman Sachs both raised their price targets to $175 from $155, with BofA highlighting Arista’s innovation capabilities and Goldman Sachs noting the company’s updated financial framework that projects significant revenue growth. These developments reflect a broad consensus among analysts about Arista Networks’ strong performance and future potential.
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