Five things to watch in markets in the week ahead
Investing.com - Evercore ISI has reiterated an Outperform rating and $175.00 price target on Arista Networks (NYSE:ANET), adding the company to its TAP OP list ahead of third-quarter earnings. According to InvestingPro data, the stock has delivered an impressive 101% return over the past six months, though current analysis suggests the stock is trading above its Fair Value.
The research firm expects Arista to deliver another beat-and-raise quarter, with potential for modest upside compared to current consensus estimates of $2.26 billion in revenue and $0.71 in earnings per share. The company has maintained strong financial health, with InvestingPro data showing a robust gross profit margin of 64% and significant cash reserves exceeding debt levels.
Evercore anticipates management will slightly increase its fiscal year 2025 revenue guidance from $8.75 billion (approximately 25% year-over-year growth) while reiterating fiscal year 2026 targets of roughly $10.5 billion in revenue (approximately 20% year-over-year) with gross margins of 62-64% and operating margins of 43-45%.
The firm identifies multiple growth drivers for Arista through the second half of 2025 and into 2026-2027, including front-end cloud demand, back-end ramps with both new and existing hyperscale and neocloud customers, and steady momentum in enterprise and campus markets. InvestingPro subscribers can access 15+ additional exclusive tips and comprehensive analysis about Arista’s growth potential and market position in the detailed Pro Research Report.
Arista is currently deploying its co-developed scheduled fabric with Meta, while diversification efforts across cloud customers should support back-end demand, with Evercore highlighting stronger trends with Broadcom and Oracle that further support the growth outlook.
In other recent news, Arista Networks has seen several developments that may interest investors. Notably, BofA Securities raised its price target for the company to $175 from $155, maintaining a Buy rating and highlighting Arista’s superior technology and innovation. Similarly, Needham increased its price target to $160 from $155, citing new Cloud/AI capabilities and investments aimed at competing with industry giants like Cisco. UBS maintained its Buy rating and a $155 price target, expressing optimism about Arista’s outlook for the calendar year 2026.
On a different note, Rosenblatt adjusted its price target to $140, maintaining a Neutral rating while emphasizing Arista’s evolving strategy in cloud integration and AI data centers. In related developments, NVIDIA announced that Meta and Oracle will adopt its Spectrum-X Ethernet networking switches, which may impact Arista Networks as these companies enhance their AI data center capabilities. These updates reflect the dynamic environment in which Arista Networks operates, with analysts offering varied perspectives on its future performance.
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