Were There Any Significant Reasons Why The Arista Networks (ANET) Stock Increased 16% Pre-Hours?

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In pre-hours trading on Tuesday, Arista Networks Inc. (ANET) climbed 15.65% to $ 472.50. In the last trading session, ANET lost -0.27% to reach $408.57. The price range for ANET shares was $408.53 – $413.78. ANET traded 0.68 million shares, which was above its daily average of 0.42 million shares over 100 days. In the last five days, ANET shares gained 5.84%, and in the past month, they increased by 16.57%. ANET stock is surging pre-hours after posting beating results. ANET stock is trading at 44.58 price to earnings and 8.45 price to book ratio. In addition, the price-to-cashflow ratio stood at 34.59. ANET stock has surged pre-hours after beating expectations.

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What has ANET accomplished this quarter?

Networking company Arista Networks specializes in client-to-cloud data-driven networking for large data centers, campuses, and routed networks. Featuring CloudVision and Arista EOS, an advanced network operating system, ANET’s award-winning platforms provide unparalleled availability, agility, automation, and analytics. ANET has registered and unregistered trademarks including ARISTA, CloudVision, CloudEOS, and MSS in jurisdictions worldwide.

The financial results for Arista Networks’ third quarter ended September 30, 2021 were released today.

Quarterly financial highlights:

  • As of the third quarter of 2021, ANET generated $748.7 million in revenue, an increase of 23.7% from the third quarter of 2020 and an increase of 5.8% over the second quarter of 2021.
  • Compared to GAAP gross margins of 64.2% in the second quarter of 2021, and 63.6% in the third quarter of 2020, ANET’s GAAP gross margin in the third quarter of 2021 was 63.9%.
  • According to non-GAAP measures, ANET’s non-GAAP gross margin was 64.9%, compared with 65.2% in the second quarter of 2021 and 64.6% in the third quarter of 2020.
  • The GAAP net income for ANET’s third quarter of 2021 was $224.3 million, or $2.81 per diluted share, compared with $168.4 million, or $2.12 per diluted share, in the corresponding quarter
  • An operating income of $236.9 million, or $2.96 per diluted share, generated by ANET in the third quarter of 2021 was greater than its year-ago quarter operating income of $192.0 million, or $2.42 per diluted share.

Split and outlook for the stock:

Among other changes, Arista’s board approved a 4-for-1 stock split to make investments readily available to a broader base of investors. On or about November 18, 2021, trading will begin on a split-adjusted basis for shares held in the account of every Arista (ANET) shareholder of record on November 11, 2021. According to ANET, the company expects revenue of between $775 million and $795 million for the fourth quarter of 2021, non-GAAP gross margins of 63% to 65%, and non-GAAP operating margins of around 37%.