Yes, most equipment companies seasonally have Q4 as their best quarter. Almost universal. Look at PSTG as an example, why is storage biggest in Q4? It just is for capital budgeting reasons as gwsong states.
Something not mentioned here is that Arista earned $1.72 per share this quarter. The high (not the average, the high, and quite outlying earnings estimate for this year on Yahoo!) Is $7.20. Unless something really not Arista happens this year, Arista is on course to do at least $7.50 to $8 a share in earnings, as year over year earnings growth will be seen each quarter.
Next year, earnings per share is likely to be $2.55 a share. Even if earnings per share were sequentially flat for the next 3Qs you still get $7.68 in earnings per share for the coming year. And EPS is not going to be sequentially flat unless something really material has changed with the business. It seems quite likely that $8 a share or greater will be earnings for the next fiscal year.
That is what I predicted a year ago, and the highest analysts estimate out there, that is an outlier has to be raised, much less all the other analysts with earnings estimates in the mid $5 to low $6 range. IBD will again maintain Arista as a top rated stock as all the analyst estimates have to increase again for earnings per share.
Or, Arista’s business may be falling the way of the “resurgent” Cisco. Could happen.
I am the first one out if I feel revenue is going to fall off a cliff, or something else materially is wrong. That is my first impression on earnings after looking just after the earnings per share this quarter. Yes, $8 a share or more this year is likely. Thereafter $10 a share or more is likely for the following year with continuous and meticulous high margin growth.
May be too soon to call earnings per share for the following year, but earnings per share for the coming fiscal year, nothing is guaranteed, but as an analyst $8 a share appears to be a very likely outcome.
Tinker