Arista Networks (ANET 7.12%) stock tumbled on Wednesday following the company's latest quarterly report. The networking hardware and software specialist's share price ended the daily session down 13.6% and had been off as much as 17.4% earlier in trading.
Arista published its Q1 results after the market closed yesterday and actually reported sales and earnings that beat the average Wall Street analyst forecasts. Despite the beats, the stock still got hit with a double-digit pullback today.
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Arista Networks Q1 print was encouraging
Arista recorded non-GAAP (adjusted) earnings per share of $0.87 and sales of $2.71 billion in the first quarter. The results came in significantly ahead of the average analyst estimate, which had called for adjusted earnings per share of $0.81 on revenue of $2.62 billion.
Thanks in part to AI-related demand, Arista saw revenue increase roughly 35% year over year in Q1. Meanwhile, adjusted earnings per share were up roughly 32% year over year.
NYSE: ANET
Key Data Points
Arista's guidance wasn't enough for investors
With its Q1 report, Arista issued guidance for sales of roughly $2.8 billion in the current quarter. While the forecast narrowly exceeded the average Wall Street estimate's call for sales of $2.78 billion in the period, some investors were looking for stronger guidance. Adding another bearish catalyst, Arista is seeing some supply constraints that are creating headwinds for near-term performance. While the stock saw a substantial pullback today, the business's quarterly results were actually quite strong -- and the post-earnings pullback could be an overreaction to near-term headwinds.
