2024-04-30 17:54:30 ET
Summary
- Arista Networks has seen strong revenue growth from cloud titan customers, but there are reasons to be cautious.
- Meta has increased its capex forecast for FY24, which will benefit Arista's top-line growth.
- However, gross margin expansion and resulting EPS growth are slowing down, which will call into question Arista's expensive +30x P/E ratio.
Q1 earnings season is now well underway, and with tremendous volatility in the stock market, it's a great time for investors to be cautious with their portfolios as individual stocks have been more jumpy on headline results. And with interest rate policy for the remainder of the year still quite unclear, there's even more reason to be careful on investing in richly valued names....
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For further details see:
Arista Networks: Take Caution Ahead Of Earnings (Rating Downgrade)