Is It Worth Investing in Arista Networks (ANET) Based on Wall Street's Bullish Views?

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?

Let's take a look at what these Wall Street heavyweights have to say about Arista Networks (ANET) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.

Arista Networks currently has an average brokerage recommendation (ABR) of 1.68, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 19 brokerage firms. An ABR of 1.68 approximates between Strong Buy and Buy.

Of the 19 recommendations that derive the current ABR, 12 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 63.2% and 5.3% of all recommendations.

Brokerage Recommendation Trends for ANET

Check price target & stock forecast for Arista Networks here>>>

While the ABR calls for buying Arista Networks, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.