2023-03-22 10:57:40 ET
Arista Networks ( NYSE: ANET ) has outlined its entry into the Routed Wide Area Network space, and that should pave the way to a planned market expansion that will amount to $2B-$3B or more, Wells Fargo says.
The company's Arista WAN Routing System combines three new offerings intended to simplify customer WANs: enterprise-class routing platforms, carrier/cloud-neutral Internet transit, and the CloudVision Pathfinder Service.
Arista had talked about Routed WAN at a November analyst day that followed up an earnings report featuring record revenues . (That analyst day resulted in a 7% stock jump alongside a Buy-equivalent upgrade at Piper Sandler .)
In its presentation, the company set up Routed WAN as one of the areas of adjacent market expansion that helped make up its "Arista 2.0" vision for 2023-2025. Gartner in December forecast the SD-WAN market would grow from $4B in 2022 to $7.4B by 2026, and Arista saw the WAN Routing market in particular as setting up an incremental opportunity of $2B-$3B and even more, with products to come this year.
Those announcements are here, and Arista says the systems (its 5510 and 5310 WAN Routing Systems) are in active customer trials and deployments and headed for general availability in the summer, at $77,495 and $21,495 respectively.
That's led analyst Aaron Rakers and team to boost its price target on Arista ( ANET ) to $200 from a previous $170 - about 26 times projected 2025 earnings per share, in line with a five-year media. That price now implies 19% upside in the stock.
Arista recently got a boost as Goldman Sachs reinstated coverage of the company with a Buy rating .
For further details see:
Arista's Routed WAN launch set to boost market by $2B-$3B - Wells Fargo