today we find out about ANET

We finally find out if ANET growth is slowing today.

Here are the quarterly revenue growth rates in %.

2015 53 42 40 42
2016 35 37 33 34
2017 39 51 51 43
2018 41 28 29

The last 2 quarters were low because of tough comps., but they have continued on the 38-39% growth rate.

They only forecast high 20’s this quarter so either:

a) They come in just above forecast and growth has slowed


b) they are going to continue on the same growth rate and they will come in above 35%, which should be great for the stock, because it will appear like they are re accelerating.

We shall see.


“Revenue of $595.7 million, an increase of 5.8% compared to the third quarter of 2018, and an increase of 27.3% from the fourth quarter of 2017.”

Now to see what they are projecting for 2019.

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Well after hours up huge, so someone likes this report.


I still hold ANET around a 7% position that is up significantly in my taxable account. I sold shares around $260 in my IRA. Am listening to the call now, but I’ll need to read the transcript as well. Microsoft was a huge customer for the year (bigger than normal) that they believe will moderate this year.

However, they didn’t say other cloud titans would be scaling back.

EV/S at $260/share is about 8.9.
P/E at $260 is 32.7.

Revenue is growing around 27% against tough comparison recently. The next quarter still compares against 41% growth, but then things get a bit easier.

I have been holding until the comparisons are less difficult.

Finally, they admit the campus market represents the largest TAM and is the area that requires the company’s biggest effort.

Will be interesting to read further.



Welll… apparently they are slowing down. “Only” 27% vs easing (but not yet “easy“) comps:

2015 53 42 40 42
2016 35 37 33 34
2017 39 51 51 43
2018 41 28 29 27

CAGR vs 2017 has come down from 40% in Q3 to now 35% in Q4.

Doesn’t look like a re-acceleration to me but at least the stock is up nicely in aftermarket. Let’s see what tomorrow brings.

Might still be a long-term winner if they can sustain the 30% level and keep being profitable.


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I am glad I did not sell all of my position. Yes, the company is slowing to the mid 20s but the multiple has contracted substantially. A lot of folks had given up after Nvidia and Intel EC on DC fears. Arista proved them wrong and beat rev estimates and hence the AH price action. This management is absolutely phenomenal. I plan to read the transcript and if it appears that the company is doing well in the campus markets then this stock will be a long term hold for me. I realize it is hw and comes with its challenges but still worth a 7% allocation.


Dudes. Quit posting proprietary information from a paid site. It isn’t fair to subscribers. It’s stealing. Theft. It’s just wrong. Quit doing it.



Nothing personal but,
WTF part of
Do you not understand?


Sorry, I’m trying to get it deleted.

Now to see what they are projecting for 2019.

They have repeatedly only forecasted one quarter out. Per CFO Ita Brennan the only time they’ve released a year-out estimate is when analysts had it very wrong. She said she’s comfortable with what consensus is now, i.e. 25% growth.

1Q19 midpoint $593MM is 25.6% YoY. Range stated $588-598MM. with 64% GM and 35% Oper Margin.

Ita re: 2019 Our revenue guidance for the first quarter are $588 million to $598 million, represents 25% year-over-year growth at the midpoint. On the gross margin front, we would reiterate our gross margin outlook of 63% and 65%, with customer mix being the key driver of where we operate within this range.

While we remain cautious in relation to our spending ramp, you should expect to see us make the investments necessary to support the expansion of the business. We believe given some reasonable top-line growth this can be accomplished while maintaining operating margin in the previously discussed approximately 35% range.

With this as a backdrop, our guidance for the first quarter, which is based on non-GAAP results and excludes any non-cash stock-based compensation impacts and other non-recurring items is as follows: revenues of approximately $588 million to $598 million; gross margins approximately 63% to 65%; and operating margin of approximately 35%; our effective tax rate is expected to be approximately 21.5%; diluted shares of approximately 81.4 million.

To me the significant number is 35%. As she states they must spend more on marketing and sales this year but with reasonable (25%?) top line growth… Operating margins in 2017 were 29.5% and 31.5% in 2018 so 35% is significant. I estimate with 25% top line growth sales of $2,684 x .35 = $939MM. That is 38.5% income growth



Hey Joe-

The 35% operating margin forecast is non-gaap. I’m showing (non-gaap) 2017 at 35.6% and 2018 at 36.7%, so they are forecasting it to come down.


Thanks for that correction Jim

I was adding back the $405MM litigation expense this year but not stock based comp and amortization items.

Sorry, I’m trying to get it deleted. <<

My apologies for that post. I had surgery last night (only an ankle) but they put me on some good pain meds and I shouldn’t have been posting anything. I know better.