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Investing.com - Piper Sandler has raised its price target on Arista Networks (NYSE:ANET) to $145.00 from $143.00 while maintaining a Neutral rating on the stock. With a current P/E ratio of 60.25 and market capitalization of $192.99 billion, InvestingPro analysis indicates Arista is trading above its Fair Value, despite delivering a 51.61% price return over the past year.
The firm noted that Arista shares fell approximately 10% in after-hours trading following the company’s earnings report, which showed revenue and product billings deceleration. Investors had set high expectations that weren’t fully met, as the fourth-quarter exit rate wasn’t raised as much as some had anticipated. This reaction comes despite Arista’s impressive 25.97% revenue growth over the last twelve months.
Despite these concerns, Piper Sandler highlighted encouraging signs including a $625 million quarter-over-quarter increase in product deferred revenue. The firm also noted significant increases in purchase commitments and inventory, suggesting new product traction and growing backlog with large Cloud and AI customers. InvestingPro data shows Arista maintains a "GREAT" financial health score of 3.58, with the company holding more cash than debt on its balance sheet.
The research note indicated that component and supply chain issues likely affected shipment timing during the quarter, which could result in lower gross profit margins due to product mix changes.
Piper Sandler expects upcoming investor discussions to focus on AI adoption across various industry verticals, enterprise refresh cycles, and Arista’s new go-to-market investments.
In other recent news, Arista Networks reported its Q3 2025 financial results, demonstrating a strong performance. The company achieved an earnings per share (EPS) of $0.75, surpassing the forecasted $0.71. Additionally, Arista Networks’ revenue reached $2.31 billion, exceeding expectations of $2.26 billion. Despite this earnings beat, Arista’s stock experienced a decline in after-hours trading, influenced by broader market trends and potential future challenges. These recent developments highlight the company’s ability to outperform financial expectations.
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