By Senad Karaahmetovic
Shares of Arista Networks (NYSE:ANET) are moving higher in pre-market Tuesday after the company delivered better-than-expected Q4 results.
The computer networking company posted EPS of $1.41 on revenue of $1.28 billion, beating the analyst consensus for earnings of $1.21 on revenue of $1.2B. Revenue soared by 55% year-over-year, helped by the product revenue that surged 64% YoY.
"Arista continues to help our customers deliver innovative network transformation platforms for data-driven cloud networking. Despite having to navigate industry wide supply chain challenges, FY22 was a year of record performance exceeding expectations in growth, revenue and profitability," stated Jayshree Ullal, President and CEO of Arista Networks.
For this quarter, the company sees revenue at $1.3B (up or down $25 million), beating the consensus of $1.21B.
Morgan Stanley analysts hiked the price target on ANET stock to $140 per share after a "meaningful beat."
"Challenge for more material upside remains proving out timing of AI upside vs. concerns on cloud capex. Best-in-class company, but remain EW given demand strong, but deceleration makes multiple expansion challenging," the analysts said in a note.
Oppenheimer analysts described results as "another strong beat."
"The company continues to benefit from Cloud Titan spend (Meta/Microsoft top customers) and share gains at enterprise customers. This growth is especially commendable given supply chain constraints and lengthy component lead times. We believe the core product strength (100G and 400G), driven by adoption of AI, strong CapEx spend from Cloud Titans/DC, and expansion into Campus, can easily help Arista exceed its 25% growth target for 2023, despite coming off an exceptionally strong year. That said, while we do like Arista's LT growth opportunity, valuation continues to keep us on the sidelines," wrote the analysts.