Wall Street analysts are optimistic about Arista Networks, suggesting it may be a good buy for investors looking for growth opportunities
City: New York. When it comes to buying stocks, many folks look to analysts for guidance. But do these recommendations really matter? Let’s dive into what Wall Street thinks about Arista Networks (ANET).
Currently, Arista Networks has an average brokerage recommendation of 1.66, which is pretty close to a “Strong Buy.” This score comes from 19 different brokerage firms, with 13 of them giving it a “Strong Buy” and one a “Buy.” That’s a solid majority leaning towards a positive outlook.
While the recommendation suggests buying, it’s wise not to base your investment solely on this. Studies show that these brokerage recommendations don’t always lead to the best stock picks. Analysts often have a bias because of their firms’ interests, which can skew their ratings.
For instance, brokerage firms tend to give five “Strong Buy” ratings for every “Strong Sell.” So, their recommendations might not always align with what retail investors need to know about a stock’s future price.
To make better decisions, it’s smart to use these ratings alongside your own research. One tool that can help is the Zacks Rank, which categorizes stocks based on earnings estimate revisions. This method has a strong track record for predicting stock performance.
Unlike the average brokerage recommendation, the Zacks Rank is based on actual earnings estimates and is updated more frequently. This means it can give you a clearer picture of where a stock might be headed.
For Arista Networks, the Zacks Consensus Estimate for this year has recently gone up by 0.5% to $2.20. This increase shows that analysts are feeling more optimistic about the company’s earnings, which could lead to a price jump soon.
With a Zacks Rank of #2 (Buy), Arista Networks looks like a solid option for investors. So, while the average brokerage recommendation is helpful, it’s best to combine it with other tools for a well-rounded view.
