Analysts support Arista

…Analysts stuck to their guns in the wake of the postmarket decline, particularly sticking up for an Arista outlook that many pointed to as the reason shares were selling off.

RBC…says the forecast (for revenues of $450M-$468M, vs. consensus for $457.8M) still looks conservative and that upside from high data center expectations were likely priced in during the quarter. It still sees the company growing at 20-30% vs. a market growing in the high teens, and lowered his price target to $295, now implying 18% upside.

Morgan Stanley… thinks there’s more demand in the market than Arista can currently satisfy, a situation that can help it it beat estimates this year and next if availability improves and hyperscale cloud demand recovers.

UBS raised its price target to $280;
Needham has said it’s buying the dip with a target of $315; and
Barclays has boosted its target to $329, implying 32% upside.
Gabelli took the step of downgrading to Hold…

Thanks to Seeking Alpha news article. I hope this may relieve some of the angst on the board.

Saul

20 Likes

Noting the decent posts here on the board about the 3 day rule…I have a hunch the timing of this weekend will allow folks to more fully analyze and digest the situation with Arista and that Monday may see a rose to $260-ish.

Tinker’s observation of Arista having an EV/cash flow ratio of about 22.5x is a very poignant observation and has sparked me to consider a new valuation metric incorporating that ratio along with some thoughts sparked by Bear’s “marginal thinking”/assuming a margin of 30% to compare companies at a high, high level (which is a simple repackage of P/S).

Longer post on this planned for later when at an actual keyboard.

-volfan84
Long a “4/3rds” position in ANET

4 Likes

Tinker’s observation of Arista having an EV/cash flow ratio of about 22.5x is a very poignant observation and has sparked me to consider a new valuation metric incorporating that ratio along with some thoughts sparked by Bear’s “marginal thinking”/assuming a margin of 30% to compare companies at a high, high level (which is a simple repackage of P/S).

Longer post on this planned for later when at an actual keyboard.

Here is the longer post I mentioned earlier:

http://discussion.fool.com/evfcf-ratioa-superior-valuation-metri…