Arista Networks (ANET) PT Lifted to $90 on Classic 'Beat and Raise'

Needham & Company analyst Alex Henderson reiterated a Buy rating and boosted his price target on Arista Networks (NYSE: ANET) to $90.00 (from $75.00) following a classic 'beat and raise' Q2.

Henderson commented, "Arista crushed estimates and guidance. Revenues came in 9.5% above forecast at $137.9 million compared to our and Street estimates of $126.0 million. Further, Revenues increased a sparkling 63.7% year-over-year and 17.7% Q-Q. EPS was even more impressive. Arista delivered a $0.27 EPS in the quarter as compared to our and Street estimates at $0.11."

Sharply Increasing Estimates; Retaining Conservative Bias to Forecasts:

• Raising CY 14 Revenues increase to $550 million from $526 million-the new estimate reflects a 52% yr-yr growth rate
• Raising CY14 EPS increases to $1.02 from $0.62—This is actually above our prior estimate for CY15 of $0.91.
• Raising CY15 Revenues increase a more moderate amount to $706 million from $700 million, still a 28.5% growth rate.
• Raising CY15 EPS increases to $1.10 from $0.91
• Introducing our CY16 estimates at $1.43 on another 18% increase in Revenues to $834 million in Revenues.
• We are raising our Target Price to $90 from $75 reflecting the higher EPS and the CY16 estimates. Valuation Challenging But Justifiable in our view Given the exceptionally strong Growth--We Think Management is Key: Our new TP puts ANET at 62x P/E on CY16 estimates. On an EV/E basis, we are targeting 58x CY16. We think that ANET is still in the early stages of its growth trajectory, and we beleive it deserves this premium valuation. We think our estimates are conservative and leave plenty of room for upward revisions in future periods.

For an analyst ratings summary and ratings history on Arista Networks click here. For more ratings news on Arista Networks click here.

Shares of Arista Networks closed at $72.22 yesterday.

You May Also Be Interested In

• Jefferies Downgrades LTIMindtree Ltd (LTIM:IN) to Underperform
• SL Green Realty (SLG) PT Lowered to $45 at Jefferies
• Hindustan Unilever Ltd (HUVR:IN) PT Lowered to INR2,560 at JPMorgan