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Arista Networks Is Challenging Cisco in Campus Networking

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Arista Network stock is up ~6% this week

Arista Networks (ANET) stock is up more than 6.0% this week after it declined 8.5% on May 4, driven by disappointing revenue guidance provided by the firm. Arista Networks is one of the most disruptive networking companies in the industry. On May 8, the company revealed products that it expects to challenge Cisco Systems in the campus networking space.

Arista Network estimates the total available market (or TAM) to be $3.0 billion–$4.0 billion. However, it doesn’t expect any material revenues from these initiatives until fiscal 2020. Morgan Stanley (MS) is optimistic about Arista Networks and reiterated an “overweight” rating in the stock with a price target of $310.00.

Morgan Stanley analyst James Faucette stated, “For us, ANET’s attraction as a stock is the push into new markets, including campus, that the company is just beginning.”

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Cisco reported a decline of 1.4% YoY in Ethernet switching

Arista Network (ANET) is quickly becoming a major player in the Ethernet switching space. In 4Q17, ANET recorded revenue growth of ~41.0% YoY and held a market share of 5.9%. In 2017, its revenues rose 44.5%, and ANET had a market share of 5.6%.

Cisco Systems’ (CSCO) revenues fell 1.4% YoY in Ethernet switching and ended 4Q17 with a market share of 53.0%. In 2017, Cisco’s Switching revenues rose 1.5% with a share of 54.9%.

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