What’s Driving The Selloff In Arista Networks’ Stock


Arista Networks (NYSE:ANET), a provider of cloud networking solutions, saw its stock decline by about 24% in Friday’s trading. The selloff came after the company provided a disappointing outlook for Q4 2019 while warning that a large customer was scaling back on its orders. The company’s key customers include Microsoft and Facebook, each of which accounts for over 10% of revenues. Arista projected sales of $540 million to $560 million for Q4, compared to analyst estimates of $686.3 million, per Bloomberg. Below, we take a look at how the company fared in recent years and what the outlook could be like.

View our interactive dashboard analysis on Why Did Arista Networks Stock Tank On Friday?

How does Arista Networks’ Revenue Growth in 2018 compare with that in prior periods and what’s the forecast?

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Total Revenues for Arista Networks substantially increased from $1.65 Bil in 2017 to $2.15 Bil in 2018; an increase of 30.7%.

This compares with Total Revenues growth of:

  • 43.4% in 2015
  • 34.8% in 2016
  • 45.8% in 2017

We expect Total Revenues growth to be 15.7% in 2019.

How does Arista Networks’ Total Expense in 2018 compare with that in prior periods and what’s the forecast?

Total Expense for Arista Networks substantially increased from $1.17 Bil in 2017 to $1.86 Bil in 2018; an increase of 59.0%, on account of expenses related to a legal settlement with rival Cisco.

This compares with Total Expense growth of:

  • 49.5% in 2015
  • 28.2% in 2016
  • 32.1% in 2017

We expect Total Expense growth to be -9% in 2019, due to lower one-time charges compared to 2018.

How does Arista Networks’ EBT in 2018 compare with that in prior periods and what’s the forecast?

EBT for Arista Networks decreased substantially by -39.2% from $475 Mil in 2017 to $289 Mil in 2018.

We expect EBT to increase by 170% to $790 Mil in 2019.

How do Arista Networks’ Net Income and EPS in 2018 compare with that in prior periods and what’s the forecast?

For more information on Arista Networks’ Net Income and EPS, view our interactive dashboard analysis

 

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