---
title: "Why did Arista Networks (ANET) stock fall 8.34% before its Nov. 3 earnings?"
canonical_url: https://www.stockexpertai.com/journal/2026-10-31/why-did-arista-networks-anet-stock-fall-8-34-before-its-nov-3-earnings-b7929b14edbb
last_updated: 2026-10-31T04:38:54.702Z
section: "AI Signals"
author: "Stock Expert AI Research"
publisher: Stock Expert AI
tickers: ANET
content_type: journal-article
---

# Why did Arista Networks (ANET) stock fall 8.34% before its Nov. 3 earnings?

_Arista shares traded at 168.86 USD on the latest quote as of Oct. 30, 2026, and the company reports third-quarter results on Nov. 3 after a strong second quarter._

![Data cover: Why did Arista Networks (ANET) stock fall 8.34% before its Nov. 3 earnings?](/public-objects/streetnews/2026-10-31/AI_SIGNALS-cover-14a89b57.jpg)
Stock Expert AI data cover: figures from Financial Modeling Prep; background is an illustrative public-domain photo, credited on the image.

Arista Networks (NYSE: ANET) shares fell 8.34% on the latest quote, as of Oct. 30, 2026, to 168.86 USD, days before the company is due to report earnings on Nov. 3, 2026. The drop comes after a second quarter (ended June 30, 2026) in which revenue and profit beat analyst estimates, so the question for investors is whether expectations or the business changed. Figures below are current as of Oct. 30, 2026 and cover the quarters through June 30, 2026, the latest reported.

## Key facts

- **Oct. 30, 2026:** ANET traded at 168.86 USD, down 8.34% on the latest quote. Its 52-week range is 114.52-217.41 USD, and market cap is $212.97B.
- **Nov. 3, 2026:** next earnings report. Analysts expect EPS (earnings per share) of 1.08 and revenue of $3.33B.
- **Aug. 4, 2026:** Arista reported EPS of 1.02 against an estimate of 0.886, a beat of $0.13 or 15.1%. Revenue was $3.04B against an estimate of $2.83B, a beat of $205.4M or 7.3%.
- **Quarter ended June 30, 2026:** revenue rose 37.7% from a year earlier and net income rose 36.5%.
- **Oct. 30, 2026:** the stock trades at a trailing-12-month P/E (price divided by the last year's earnings) of 52.60.

| Metric | Q2 FY2026 (ended June 30, 2026) | Q2 FY2025 (ended June 30, 2025) |
|---|---|---|
| Revenue | $3.04B | $2.20B |
| Operating income | $1.38B | $986.2M |
| Net income | $1.21B | $888.8M |
| Diluted EPS | 0.95 | 0.7 |
| Product revenue | $2.61B | $1.88B |
| Service revenue | $430.5M | $327.8M |

## What happened

The news is a sharp one-day move in the share price, not a company announcement. We found no company release behind it, and the recent headlines we reviewed were comparison pieces and market commentary rather than new company information. We therefore cannot say what caused the decline. The earnings date is near, but no cause for the move is confirmed.

The backdrop is the quarter Arista last reported. For the quarter ended June 30, 2026, the company posted revenue of $3.04B, operating income of $1.38B and net income of $1.21B. Revenue was higher than a year earlier by 37.7%. FMP lists two per-share figures for that quarter: 1.02 as the reported EPS used for the estimate comparison, and 0.95 as diluted EPS in the filed statements. These differ because of how each is calculated, and the comparison with analysts uses the 1.02 figure.

By segment, product revenue (the networking hardware) was $2.61B and service revenue (support and software subscriptions) was $430.5M. Both were higher than a year earlier. By region, the Americas contributed $2.34B, EMEA $438.2M and Asia Pacific $259.6M.

We did not have a call transcript for this piece, so we do not quote management on what drove the growth.

## Why it matters for investors

**Operating margin hit a five-quarter high; gross margin remains below its year-ago level.** The five-quarter trend below shows how profitability moved. Gross margin (the share of revenue left after the direct cost of goods) slid from 65.2% to 61.9% and then rose to 62.9%. Operating margin (profit after operating costs, as a share of revenue) was lowest at 41.5% and reached 45.4% in the latest quarter, the highest in the five. The table shows that growth in the latest quarter came with better profitability, not just more sales.

| Quarter (ended) | Revenue | Gross margin | Operating margin | Net income |
|---|---|---|---|---|
| Q2 FY2025 (June 30, 2025) | $2.20B | 65.2% | 44.7% | $888.8M |
| Q3 FY2025 (Sept. 30, 2025) | $2.31B | 64.6% | 42.4% | $853.0M |
| Q4 FY2025 (Dec. 31, 2025) | $2.49B | 62.9% | 41.5% | $955.8M |
| Q1 FY2026 (Mar. 31, 2026) | $2.71B | 61.9% | 42.7% | $1.02B |
| Q2 FY2026 (June 30, 2026) | $3.04B | 62.9% | 45.4% | $1.21B |

**Cash generation is strong but uneven.** Free cash flow (cash from operations minus capital spending) was $1.05B in the June 2026 quarter, after $1.64B in the March 2026 quarter and $1.22B in the December 2025 quarter. It was $1.24B in the September 2025 quarter and $1.18B in the June 2025 quarter. The latest quarter's operating cash flow was $1.08B, so the cash figure was lower than the prior quarter even as profit rose. Capital spending stayed small at $29.7M. FMP's buyback data for the last two quarters carries opposite signs ($26.2M in the June 2026 quarter and -$26.2M in the March 2026 quarter), so the June figure is not a clear repurchase outflow. Arista pays no dividend.

**The balance sheet is not a worry.** As of June 30, 2026, Arista held $13.34B in cash and short-term investments, had no debt, and had shareholders' equity of $14.80B. FMP's Altman Z score (a bankruptcy-risk gauge, where higher is safer) is 16.82. Its Piotroski score (a 0-9 financial-health checklist) is a middling 4.

**How it compares with peers.** Arista's net margin over the trailing 12 months is 38.4%, well above the peers below, but it also carries the highest P/E.

| Company | Market cap | P/E (trailing) | Net margin |
|---|---|---|---|
| Arista (ANET) | $212.97B | 52.60 | 38.4% |
| Cisco (CSCO) | $412.04B | 31.10 | 21.0% |
| Dell (DELL) | $269.69B | 24.25 | 7.5% |
| Hewlett Packard Enterprise (HPE) | $73.13B | 27.41 | 6.6% |
| IBM | $243.66B | 21.66 | 16.0% |

Other trailing valuation measures for Arista are a price/sales ratio of 20.20, EV/EBITDA (company value relative to operating earnings) of 41.45, and price/free cash flow of 41.31.

**What analysts think.** Of 53 ratings, 41 are Buy and 12 are Hold, with none at Sell, giving a consensus of "Buy" according to the analysts tracked by FMP. Their price targets average 226.64 USD with a median of 237.50 USD, a high of 289.00 USD and a low of 164.00 USD. The Oct. 30 price of 168.86 USD sits close to the bottom of that range. Recent actions were TD Cowen on Oct. 19, 2026 and Citigroup on Oct. 8, 2026, both maintaining Buy.

**Our MoonshotScore.** Stock Expert AI's MoonshotScore V2 for Arista is 84.1, rated Exceptional. Its sector-relative pillars are quality 88, growth 85, safety 82, momentum 75 and valuation 26. In plain terms, the business scores well on profitability, growth and financial safety, while valuation is the clear weak spot compared with its sector.

## What could go wrong

- **Valuation leaves little room.** A P/E of 52.60 means the market already expects strong growth. Our valuation pillar of 26 reflects that. FMP's discounted cash flow model, one automated estimate of fair value, gives 90.85 USD per share, well below the current price. Such models depend heavily on their assumptions, so treat it as one input, not a verdict.
- **Gross margin has not fully recovered.** It was 62.9% in the latest quarter, lower than the 65.2% of a year earlier. The evidence we reviewed does not explain the decline in gross margin.
- **Insider selling.** Among the 30 most recent insider filings, those dated in the last 90 days show 0 open-market purchases and 28 sales, though FMP notes that older filings in the window may be missing. Insider sales are often routine, such as pre-arranged plans, but the filings reviewed show no open-market purchases.
- **Earnings reaction risk.** Because the stock is priced for growth, even a result above estimates can be met with a decline if guidance disappoints.

## What to watch next

- **Nov. 3, 2026 results:** whether revenue reaches the $3.33B estimate and EPS the 1.08 estimate, and how far the numbers land above or below them.
- **Gross and operating margin:** whether gross margin holds near the latest 62.9% and operating margin stays near 45.4%.
- **Management's outlook:** what the company says about demand and next-quarter revenue.
- **Cash flow:** whether free cash flow returns toward earlier levels after the dip to $1.05B.
- **Longer-range estimates:** analysts see revenue of $4.36B for the period ending March 30, 2028 (EPS 1.43, 9 analysts) and $4.71B for the period ending June 30, 2028 (EPS 1.54, 8 analysts).

## Frequently asked questions

## Q: Why did Arista Networks stock drop on October 30, 2026?

Arista shares fell 8.34% to 168.86 USD on the latest quote as of Oct. 30, 2026, and we found no company announcement explaining it. The move came just before the Nov. 3 earnings report, and the headlines we reviewed were market commentary, so the specific cause is not confirmed.

## Q: When does Arista report earnings and what do analysts expect?

Arista is scheduled to report on Nov. 3, 2026. Analysts expect EPS of 1.08 and revenue of $3.33B. In the prior report on Aug. 4, 2026, the company beat estimates on both measures.

## Q: Is Arista Networks expensive compared with Cisco, Dell, HPE and IBM?

On trailing earnings, yes: Arista's P/E of 52.60 is higher than Cisco at 31.10, HPE at 27.41, Dell at 24.25 and IBM at 21.66. Arista also has a much higher net margin of 38.4%, against 21.0% for Cisco, 16.0% for IBM, 7.5% for Dell and 6.6% for HPE.



*This is educational content, not investment advice. Past performance does not guarantee future results.*

## Related Tickers
- [ANET](https://www.stockexpertai.com/stock/anet)

## Sources
- [Stock Expert AI ANET page: quote, financials and MoonshotScore](https://www.stockexpertai.com/stock/anet)
- [fool.com: Arista Networks vs. Monday.com: Which Technology Stock Is a Better Buy in 2026?](https://www.fool.com/coverage/better-buy/2026/10/30/arista-networks-vs-monday-com-which-technology-stock-is-a-better-buy-in-2026/)
- [fool.com: Arista Networks vs. Figma: Which Technology Stock Is a Better Buy in 2026?](https://www.fool.com/coverage/better-buy/2026/10/30/arista-networks-vs-figma-which-technology-stock-is-a-better-buy-in-2026/)
- [zacks.com: Arista Networks (ANET) Declines More Than Market: Some Information for Investors](https://www.zacks.com/stock/news/3019077/arista-networks-anet-declines-more-than-market-some-information-for-investors?cid=CS-STOCKNEWSAPI-FT-fundamental_analysis|yseop_template_6-3019077)
- [zacks.com: 5 Stocks With High ROE to Bet on as AI-Infused Rally Spurs Markets](https://www.zacks.com/stock/news/3018739/5-stocks-with-high-roe-to-bet-on-as-ai-infused-rally-spurs-markets?cid=CS-STOCKNEWSAPI-FT-analyst_blog|rw-3018739)

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_Written by Stock Expert AI's research desk with AI assistance. Figures come from FMP data and the official sources cited in the article. Educational research, not financial advice._