Needham & Company analyst, Alex Henderson, would be a buyer of Arista Networks (NYSE: ANET) into the 25G upgrade cycle. He thinks Arista is on track to become a multi-billion dollar company and take as much as 20-40% market share from Cisco over the long term.

The shift to 25G architectures should accelerate Arista's share gains and the Jericho chip should collapse the $8.6B Edge Router market TAM into the Switching market. Arista could pick up 3-5 points of market share on a base of 12% driving continued stronger than forecast growth. The analyst thinks shares are a bargain due to patent concerns that he sees as unwarranted.

Arista solidly beat estimates and guidance, again. Revenues came in 2% above forecast at $245MM compared to Street estimates of $241MM. Further, Revenues increased a sparkling 41.5% y/y and increased 12.5% Q-Q in CY4Q. This was an acceleration from the y/y and Q-Q growth rates posted in CY3Q. EPS was even more impressive: Arista delivered $0.80 EPS in the quarter, 31% ahead of Street estimates at $0.61.

Raising CY16 Revenues increase to $1,045MM from $1,030MM, representing a 25% growth rate for the year. Raising CY16 EPS to $2.56 from $2.43. Increasing CY17 Revenues to $1,254MM from $1,236MM, representing a 20% Revenue growth rate. Increasing CY17 estimates to $2.71 from $2.63.

No change to Buy rating or PT of $105.

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Shares of Arista Networks closed at $58.15 yesterday.