How sustainable is Arista Networks' revenue growth based on recent trends?

Arista Networks' recent revenue growth appears to be sustainable based on the following points:

1. **Consistent Financial Performance**: Arista has demonstrated robust financial performance, consistently surpassing market expectations. In the fourth quarter of 2024, the company reported revenue of $1.9 billion and earnings per share (EPS) of $0.65, exceeding consensus estimates.
2. **Strong Growth Rate**: The company's revenue growth rate has been impressive, with a year-over-year increase of 25.32% in the most recent quarter. This growth is bolstered by the company's strategic positioning in the AI and cloud computing markets.

|code|Ticker|Name|Date|Total Revenue YoY|Total Revenue|market_code|
|---|---|---|---|---|---|---|
|ANET|ANET.N|Arista Networks|2024 Q1|16.28170623324362|1.571374E9|169|
|ANET|ANET.N|Arista Networks|2024 Q2|15.866213730118908|1.6904E9|169|
|ANET|ANET.N|Arista Networks|2024 Q3|19.972758397727393|1.810936E9|169|
|ANET|ANET.N|Arista Networks|2024 Q4|25.317426158940613|1.930436E9|169|

3. **Positive Analyst Outlook**: Evercore ISI has maintained a positive outlook on Arista Networks, reaffirming a price target of $130, which represents a significant upside potential from the current trading price. This optimism is supported by the company's strong financial health and growth prospects.
4. **Strategic Initiatives**: Arista's strategic initiatives, such as the launch of Nexthop AI, a new networking startup founded by former Arista Chief Operating Officer Anshul Sadana, indicate the company's commitment to innovation and its ability to adapt to market changes.
5. **Growth Guidance**: The company has provided a revenue growth guidance for 2025, projecting a year-over-year growth rate of approximately 17%. While this guidance is considered conservative by some analysts, the company's strong demand in AI and cloud networking sectors and expansion plans suggest that achieving higher growth rates could be feasible.
6. **Financial Health**: Arista's financial health is underscored by a "GREAT" financial health score of 3.34, with a strong gross profit margin of 64.13% and a robust five-year revenue CAGR of 24%. The company's gross margin of 64.2% and operating margins of 47% both outperformed analyst projections, demonstrating its ability to maintain profitability while pursuing growth.

In conclusion, Arista Networks' revenue growth appears to be sustainable based on its consistent financial performance, strong growth rate, positive analyst outlook, strategic initiatives, growth guidance, and robust financial health.