Shares of Arista Networks (NYSE:ANET) ultimately declined 3.5% in 2019, according to data from S&P Global Market Intelligence, as a streak of unfavorable quarterly reports left the tech stock badly lagging the S&P 500's 29% return.
That's not to say it was all bad; Arista started last year on a high note, roaring more than 60% higher through the middle of April -- including a 33% gain in February alone -- thanks largely to the company's better-than-expected fourth-quarter 2018 results in February.
The fun wouldn't last long, though. Arista stock plunged more than 20% in May after the company posted solid first-quarter results but followed with disappointing forward guidance that indicated top-line growth would decelerate from roughly 26% to around 15% to 17% in the second quarter. To blame, according to Arista management at the time, was a single "massive cloud titan customer" -- largely understood to be Facebook (NASDAQ:FB) -- that had temporarily placed most of its orders on hold.
Indeed, shares dropped another 17% in August as Arista's Q2 results arrived near the high end of that tempered outlook, but they were once again overshadowed by forward guidance after management warned of "muted" growth in the second half.
Finally, Arista stock continued its descent by declining another 20% in November following its Q3 update, which saw the company issue guidance for fourth-quarter revenue to fall around 7.7% year over year at the midpoint of its ($540 million to $560 million) range.
"While we expect a sudden softening in Q4 with a specific cloud titan customer, we are committed to a sustainable and strong foundation of long-term growth, innovation, and profitability," elaborated Arista Networks CEO Jayshree Ullal at the time.
Of course, considering Facebook is one of only two companies (in addition to Microsoft (NASDAQ:MSFT) that comprised at least 10% of Arista's consolidated revenue last year, it was hardly surprising to see its stock fall hard as the social media titan curbed its spending.
Still, as management tells it, these are also the early stages of Arista's long-term story. So with the stock trading just below where it stood a year ago, and for investors willing to look past the near-term weakness and bet Arista has what it takes to drive sustained, long-term growth, this could be a perfect opportunity to open or add to a position.