Arista Networks Faces Mixed Performance Amid Strong Revenue Growth

Arista Networks, Inc. (ANET), based in Santa Clara, California, specializes in data-driven networking solutions for various environments, including data centers and campuses. With a market capitalization of approximately $108.7 billion, Arista operates across the Americas, Europe, and the Indo-Pacific regions.

Over the past year, the company has significantly outperformed the broader market, but the results for 2025 show a decline. ANET shares rose 17.6% in the past 52 weeks but dropped 16.5% year-to-date. This contrasts with the S&P 500 Index’s ($SPX) 11.9% gain over the same period and a slight decrease of 0.64% in 2025.

Narrowing focus, Arista has also lagged behind the Pacer Data and Digital Revolution ETF’s (TRFK) impressive 22.6% rise over the last year, which saw a minimal decline of 0.54% in 2025.

Despite delivering better-than-expected financial results, Arista’s stock price fell 4.8% after its Q1 earnings report released on May 6. The company celebrated crossing $2 billion in revenues for the first time in Q1, achieving a year-over-year revenue growth of 27.6% to slightly above $2 billion. This result exceeded market expectations by 2.3%. Additionally, Arista’s non-GAAP net income rose 29.6% year-over-year to $826.2 million, surpassing analyst forecasts.

Looking ahead to Q2, Arista anticipates a non-GAAP gross margin of 63%, a slight decrease from 64.1% in Q1, and a non-GAAP operating margin of 46%, down from the previous quarter’s 47.8%. These projections have unsettled investor confidence.

For the full fiscal year 2025, which concludes in December, analysts predict an 11.7% year-over-year increase in adjusted EPS to $2.30. Arista has a strong track record of beating earnings expectations, consistently outpacing the street’s bottom-line estimates for the past four quarters.

The stock currently holds a “Moderate Buy” consensus rating. Of the 21 analysts covering ANET, there are 13 “Strong Buys,” two “Moderate Buys,” and six “Holds.” This sentiment is slightly improved from a month ago, when one analyst recommended a “Strong Sell.”

On May 8, Barclays (BCS) analyst Tim Long reaffirmed an “Overweight” rating for ANET but reduced the price target from $126 to $119. As it stands, ANET’s average price target of $109.49 indicates an 18.6% premium to current levels, while the highest target of $130 signals a potential upside of 40.8%.

On the date of publication, Aditya Sarawgi did not hold positions in any of the securities mentioned. All information is for informational purposes. For more information, please review the Barchart Disclosure Policy here.

The views expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.