Arista Earnings: Valuation Up to $160 From $150 After Results and Guidance Beat Our Expectations

We raise our fair value estimate for shares of wide-moat Arista Networks to $160, from $150, after the firm’s third-quarter results and fourth-quarter guidance beat our expectations. Arista is putting together an impressive year of results in 2023, reflecting market share gains in the enterprise market and ongoing cloud titan spending driven by artificial intelligence buildouts. We see Arista as the preferred choice for the highest-speed networks with its hardware and software design prowess, allowing it to be a beneficiary of cloud AI spending and reflecting its wide economic moat. Nevertheless, we continue to find valuation challenging and recommend investors wait for a pullback in this high-quality stock.