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On Wednesday, Barclays (LON:BARC) analyst Tim Long adjusted the price target for Arista Networks (NYSE:ANET) shares, reducing it to $119.00 from the previous $126.00, while keeping an Overweight rating on the stock. The stock has shown significant momentum, gaining over 10% in the past week, though InvestingPro analysis indicates the stock is currently trading above its Fair Value. Long’s commentary highlighted Arista Networks’ first-quarter results, which exceeded both the company’s guidance and Wall Street expectations. Despite not updating the full-year 2025 guide due to uncertainties around tariffs, the second-quarter guidance was set higher than anticipated. Management is optimistic about 2026, foreseeing another strong year, given their visibility into lead times.
Arista Networks also expressed confidence that the long-term revenue goal of $10 billion might be achieved earlier than initially planned. This optimism is supported by the company’s strong financial performance, with current revenue growth at 19.5% and a robust five-year revenue CAGR of 24%. Based on this outlook, Barclays now models a 19% year-over-year revenue growth for 2025 and a 15% increase for 2026, potentially leading to $11 billion in revenues by 2027. The analyst noted that Arista Networks has a history of conservative guidance and suggested that the fiscal year 2025 outlook might be revised upwards as the year unfolds and the AI target could be surpassed.Want deeper insights? InvestingPro subscribers have access to over 15 additional exclusive tips and comprehensive financial metrics for Arista Networks.
The report also addressed the topic of white box displacement, with management emphasizing the advantages of branded products over white boxes, such as lower total cost of ownership, superior software, and suitability for complex configurations. Concerns regarding potential pull-forwards or changes in demand were dismissed, as the company has not observed significant pull-forward activity and demand remains relatively predictable due to the nature of Arista Networks’ business and customer base.
The company is experiencing broad-based momentum, with progress in campus and routing cognitive adjacencies. The first-quarter campus results were particularly positive. As a prominent player in the Communications Equipment industry, Arista Networks maintains strong financial health with a "GREAT" overall score from InvestingPro, supported by a robust current ratio of 4.36 and minimal debt. Barclays maintains that Arista Networks’ growth opportunity is widespread and extends over multiple years, and the firm continues to believe that the long-term revenue compound annual growth rate (CAGR) in the mid-teens could see further upside.
In other recent news, Arista Networks has reported its first-quarter earnings for 2025, surpassing expectations with earnings per share (EPS) of $0.65, compared to the forecasted $0.59. The company also exceeded revenue projections, achieving $2.01 billion against an expected $1.97 billion, marking a 27.6% year-over-year increase. Despite these strong results, Arista Networks’ stock experienced a decline in after-hours trading. The company has maintained its full-year 2025 revenue growth forecast at 17%, reflecting a cautious outlook for the second half of the year due to potential high U.S. tariffs. Needham analysts have lowered their price target for Arista Networks to $130, while maintaining a Buy rating, citing the impact of tariff uncertainties and sector-wide compression of multiples. Meanwhile, Citi analysts have increased their price target to $97, also maintaining a Buy rating, and highlighted the company’s strong position in the AI and cloud segments. Arista Networks aims to reach a $10 billion revenue milestone sooner than expected, driven by robust growth in AI networking infrastructure.
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