Arista Networks (ANET) Falls Further As It's Water-Logged And Getting Wetter
Trade-Ideas LLC identified
(
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Arista Networks as such a stock due to the following factors:
- ANET has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $40.4 million.
- ANET has traded 811,989 shares today.
- ANET traded in a range 265.4% of the normal price range with a price range of $5.35.
- ANET traded below its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on ANET:
Arista Networks, Inc. supplies cloud networking solutions in the United States and internationally. The company's cloud networking solutions consist of extensible operating systems, a set of network applications, and gigabit Ethernet switches. It also offers technical support services. ANET has a PE ratio of 37. Currently there are 11 analysts that rate Arista Networks a buy, 1 analyst rates it a sell, and 6 rate it a hold.
The average volume for Arista Networks has been 861,300 shares per day over the past 30 days. Arista has a market cap of $4.3 billion and is part of the technology sector and computer hardware industry. Shares are down 18.3% year-to-date as of the close of trading on Thursday.
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Analysis:
rates Arista Networks as a
. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the stock itself is trading at a premium valuation.
Highlights from the ratings report include:
- In comparison to the other companies in the Communications Equipment industry and the overall market, ARISTA NETWORKS INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- The revenue growth greatly exceeded the industry average of 7.2%. Since the same quarter one year prior, revenues rose by 41.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for ARISTA NETWORKS INC is rather high; currently it is at 65.23%. Regardless of ANET's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 17.89% trails the industry average.
- After a year of stock price fluctuations, the net result is that ANET's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- You can view the full Arista Networks Ratings Report.
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