Arista Networks: Analyst Likes The Company But Not The Valuation

Arista Networks IncANET

Nomura's Jeffrey Kvaal downgraded shares of Arista from Buy to Neutral with an unchanged $135 price target mostly due to the stock's valuation. According to the analyst, Arista has one of the "most durable" growth stories within his coverage and the company is doing a good job in defending against competition and expanding into markets. However, Kvaal pointed out that Nomura's stock has surged 143 percent since its initial public offering in June of 2014, which naturally implies the upside has run its course and "brings Arista to our own personal Waterloo" at a 30x multiple.

Prior Ratings

Prior to that, Barclays' Mark Moskowitz maintained an Overweight rating on the stock with a price target raised from $125 to $148. The bullish report cited Arista's encouraging partnership with Hewlett Packard Enterprise Co HPE and its growing share within the data center switching market. Related Links: Benzinga's Top Upgrades, Downgrades For April 7, 2017 What Can Uber Learn From Other Companies That Met Controversy Ahead Of An IPO?

Arista was also downgraded by analysts at Stifel Nicolaus on Monday. At that time, analysts downgraded the stock's rating from Buy to Hold but raised the price target from $130 to $135.