Until recently, plenty of people had probably never even heard of Arista Networks (NYSE: ANET). Now, it’s considered one of the most well liked tickers in the marketplace. The network company had significant success in its business of routers, network switches, and similar forms of hardware devices, and Wall Street is taking notice. The stock has beaten the S&P 500 handsomely over the past 12 months, and the story seems primed to maintain going.
There are plenty of tech stocks on the market, and a ton of them have seen big gains within the short term. What I like about Arista is the incontrovertible fact that networking and cloud computing are integral to modern technologies. That is an industry that may not going away.
Arista Networks is involved in developing networks for big enterprises through using cloud computing, routers, data centers, and other digital resources. Networks are the backbone of infrastructure for a lot of corporations, and the increasing use of cloud computing bodes well for Arista’s future.
Particularly, Arista boasts the merits of its Extensible Operating System. As the corporate notes, it’s the “core of Arista cloud networking solutions for next generation data centers and cloud networks.” The corporate has a fantastic position in cloud, and continues to innovate to remain ahead of the pack.
The corporate’s success is highlighted by its collaborations with corporations like Meta Platforms. Meta is using Arista’s Distributed Etherlink Switch for AI clusters, and marks a continuation of collaboration that dates back to 2018. This is only one example of the corporate’s merit and usefulness to major corporations. in all, Arista currently has over 10,000 cloud customers worldwide.
The stock delivered returns of nearly 100% over the past yr in comparison with an S&P 500 return of around 27%. More broadly, Arista gained 817% over the past five years and is perfectly positioned inside the industry.
Arista Networks has had three great years in a row, creating consecutive revenue growth rates of 27% in 2021, 48.6% in 2022, and 33.7% in 2023. Congruently, earnings have had significant growth rates as well. In fiscal 2021, diluted earnings per share increased by 31.94%, 60.86% in 2022, and 54.01% in 2023. Revenues in 2024 were up 17.43% through the primary three quarters, with diluted earnings per share up 37.6% to $6.41 per share.
Certainly one of the things I actually like about Arista is that it is a stock that will be checked out when it comes to net income. So many tech stocks trade at high multiples to earnings or haven’t got earnings in any respect. But Arista Networks has developed to the purpose of making meaningful earnings for shareholders. The corporate finished the primary nine months of the yr with net income of $2.05 billion. That is roughly a 39% increase from the primary nine months of the yr prior.