In the meantime, now that Morningstar has stopped showing after-hours and before-hours prices on their revamped website, would be grateful if you could tell me if you know another website which does show them?
Google Finance show them.
My brokerage (only around 1 more week until becoming TD Ameritrade, Scottrade) has updated bids and asks during after-hours (presumably before the market opens too), an estimate of price can be gleaned from this bid/ask spread.
The app/website StockTwits (like Twitter but specifically for stocks) updates the prices of things based on after-hours moves.
Latest price I see for ANET is $272…which if that holds, several of us on here will probably feel quite good about our buys around $260 (not that we’re market timers, just slightly lucky and decent judges of market overreactions).
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,
When did you think Arista would earn $8/share in 2018? If it was before the tax cuts were passed then I would consider the following:
tax decrease will boost earnings. How much?
2018 will see increased CapEx spending by companies in the US because they will be able to deduct the entire expenses in 2018. This will cause companies to front-load purchases of data center equipment leading to higher revenue and earnings for Arista.
since #2 will be true, companies will spend less on CapEx in 2019 because 2018 will be front loaded. People may be disappointed by guidance provided exactly one year from now.
Therefore, we will (probably) see upside surprises for the next 3 quarters and a disappointment 4 quarters from now.
I was able to add @ $257 today when the market opened increasing my position by 35%. ANET is now >8% of my portfolio. Happy to have bought in at this price.
2) 2018 will see increased CapEx spending by companies in the US because they will be able to deduct the entire expenses in 2018. This will cause companies to front-load purchases of data center equipment leading to higher revenue and earnings for Arista.
After further thought, I think that this extra CapEx spending will occur mostly in Q4 of 2018. If the main purpose is to expense the equipment that they will need in the following year then they will probably wait until the end of the year to purchase. This means that Q4 will probably be particularly strong. If that is indeed pull forward revenue (from Q1 2019) then Q4 reported earnings would report very weak guidance for Q1 2019.
While ANET may well be sandbagging and bet estimates for Q1-Q3 2018, I think that the growth slowing from 40%+ will be a drag on the stock. Therefore, I lightened my position this morning a bit. I now have about 11.6% position, down from about 16% before the drop this morning. Part of the lower allocation is of course due to the price drop. I also sold some long calls that I purchased in 2017, locking in those gains. I added to my PSTG position, increasing my allocation from about 4% to about 6%.
I will watch ANET a little and may further reduce my position. Not sure yet.
Latest price I see for ANET is $272…which if that holds, several of us on here will probably feel quite good about our buys around $260 (not that we’re market timers, just slightly lucky and decent judges of market overreactions).
"ANET reports earnings – on an absolute basis, there isn’t anything wrong w/the results and guide; but, given the enormous momentum associated w/this stock, the results prob. aren’t enough. Revs were essentially just inline (vs. recent history of ~MSD upside) and the guide is actually slightly below the St at the low-end (very rare for them); the stock is down ~10% quickly after hours.
Revs came in $467.9MM (vs. the St $463MM). GMs 65.9% (vs. the St 64.1%). OMs 36.1% (vs. the St 33.6%). EPS came in 1.71 (vs. the St 1.42). For the Mar Q they see $450-468MM (vs. the St $457MM), GMs 63-65% (vs. the St 64.2%), and OMs ~32% (vs. the St 33%)."
Latest price I see for ANET is $272…which if that holds, several of us on here will probably feel quite good about our buys around $260 (not that we’re market timers, just slightly lucky and decent judges of market overreactions).
Adding more at $251?
Since you asked, nope. I have plans for the majority of my present cash position (letting PSTG $17.50 call options today exercise today).
I think I will continue watching these next 2 and a half months or so, and stay on the lookout for an opportune 2020 LEAPS position in Arista Networks. With my buy last night, ANET is around an 11% position as of current prices (had been right around 10% yesterday prior to the drop and add).
Added a new postiion in my larger “Saulish” port. Took about a 7 percent postiion at 252.50.
Looking at the charts I see support at 240 ish. Originally I had an order in at 248, but the computers were bidding at the 50 day around 252. So I raised my bid.
Of course it promptly fell through to 248. I will add if it falls and bounces off of support at 240.
Eventually, I will liquidate out of my small “Saul” port if everything works out. Pure Storage is interesting.
This stock had a monster run in 2017, if you are a shareholder who is in this name from 2016 or even in mid 2017, what are the chances that you want to take some profits, especially given the recent volatility? In this market the good stocks are priced so high, it is a challenge to buy with any conviction.
I threw a stink bid out this morning and added a 4th 1/3 at $249. Seems like a pretty good deal to me, if I do say so, for a company growing revenue as quickly as they are, even if it does level off a little.
Couldn’t resist…
Use your broker if they allow afterhours trading. Even if you have not been approved (at Fidelity it takes a short phone call to gain approval - they have to read a list of 6 “be aware” items to you) you can attempt to enter a trade. The tradi ticket shows the closing price and the current bid/ask.
Interested to know how a private investor arranges to place orders after hours Saul. Have never done that but I can see it might present opportunities.
Hi streina,
I trade with Schwab on their Streetsmart.com platform, and it is one of the choices they give you when you are placing a trade after-hours. You can place it through Schwab After-Hours, or if you get permission in advance, you can place it on arca or Nasdaq during hours the Schwab After-Hours isn’t open. Also you can’t put in a market order on Schwab after hours. It has to be a limit order.
A problem is that a lot of companies are very illiquid with wide spreads in their after and before hours. When Nvidia, or Shop, or Arista, etc, posts results though there is a lot of trading. And when Arista was down $45 I didn’t care if the spread was 40 or 50 cents.
Out of curiousity, does anybody know why this sequential growth is normally low every first quarter?
Matt, not sure every year, but do you think it could be the tax changes this year? At the end of the quarter there was a lot of tax action in congress and one of the promises was immediate expensing. Perhaps companies were postponing purchaces until they found out. If true, post Jan 1 we will see all of that made up and they will jump too far after earnings release.
3) since #2 will be true, companies will spend less on CapEx in 2019 because 2018 will be front loaded. People may be disappointed by guidance provided exactly one year from now.
possibly true, but there is no need to rush, it is not a one year deal. On the other hand, companies might have postponed purchases last quarter thinking it was coming.
Many thanks for taking the time out from latest reporting analysis to reply Saul, and others, much appreciated, also those who replied to my question about after-hours prices. It is a pity that Morningstar have discontinued showing them.
"Out of curiousity, does anybody know why this sequential growth is normally low every first quarter?
Matt, not sure every year, but do you think it could be the tax changes this year? At the end of the quarter there was a lot of tax action in congress and one of the promises was immediate expensing. Perhaps companies were postponing purchaces until they found out. If true, post Jan 1 we will see all of that made up and they will jump too far after earnings release."
End of year budget flushes that are an artifact of IT/IS/R&D budget planning process. Very common pattern. Particularly subscription/renewal models where there is a tendency to wait until the last minute as a strategy to get concessions in renewals.