Arista Networks, Inc. ANET reported decent third-quarter 2020 results, wherein the top and the bottom lines beat the respective Zacks Consensus Estimate. However, both figures declined on a year-over-year basis.Net IncomeOn a GAAP basis, net income in the September quarter declined to $168.4 million or $2.12 per share from $208.8 million or $2.59 per share in the prior-year quarter, primarily caused by lower operating income.Non-GAAP net income came in at $192 million or $2.42 per share compared with $217.1 million or $2.69 per share in the year-ago quarter. The bottom line, however, beat the Zacks Consensus Estimate by 19 cents, delivering a positive surprise of 8.5%.Arista Networks, Inc. Price, Consensus and EPS Surprise Arista Networks, Inc. price-consensus-eps-surprise-chart | Arista Networks, Inc. QuoteRevenuesQuarterly total revenues declined 7.5% year over year to $605.4 million (but surpassed the company’s guidance of $570-$590 million). This was due to extended lead times and shipment constraints resulting from the COVID-19 operating environment. The top line, however, surpassed the consensus estimate of $580 million.Arista generated 75% of total revenues from the Americas and the remainder from international operations. Almost 37% of the vertical mix was driven by cloud titans, 37% from enterprise and financials, and 26% from cloud service providers. Product revenues declined to $480.2 million from $555.1 million year over year, while Service revenues grew to $125.2 million from $99.3 million supported by renewals and subscriptions.Other DetailsNon-GAAP gross profit contracted to $390.9 million from $421.2 million, with the respective margins of 64.6% and 64.4%. The non-GAAP gross margin was above the midpoint of the company’s guidance of 63-65%, reflecting the software and services mix.Total operating expenses were $196.6 million compared with $188.7 million in the prior-year quarter. The company recognized incremental COVID-19-related costs, including elevated freight and component costs. Non-GAAP operating income declined to $231.5 million from $258.2 million in the year-ago quarter with a margin of 38.2% and 39.4%, respectively.Cash Flow & LiquidityIn the first nine months of 2020, Arista generated $548.2 million of net cash from operating activities compared with $635.9 million in the prior-year period. As of Sep 30, the cloud networking company had $970.3 million in cash and cash equivalents with $247.7 million of non-current deferred tax liabilities.Q4 OutlookFor the fourth quarter of 2020, Arista expects revenues of $615-$635 million. It anticipates a non-GAAP gross margin of 63-65% and a non-GAAP operating margin of around 37%.Zacks Rank & Stocks to ConsiderArista currently has a Zacks Rank #3 (Hold).Some better-ranked stocks in the industry are Turtle Beach Corporation HEAR, Corning Incorporated GLW and Viavi Solutions Inc. VIAV, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Turtle Beach delivered a trailing four-quarter positive earnings surprise of 41%, on average.Corning delivered a trailing four-quarter positive earnings surprise of 40.7%, on average.Viavi delivered a trailing four-quarter positive earnings surprise of 17.5%, on average.Legal Marijuana: An Investor’s DreamImagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.Download Marijuana Moneymakers FREE >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Corning Incorporated (GLW): Free Stock Analysis Report Arista Networks, Inc. (ANET): Free Stock Analysis Report Turtle Beach Corporation (HEAR): Free Stock Analysis Report Viavi Solutions Inc. (VIAV): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research