Lots of readers have asked about this latest ad from the Motley Fool Stock Advisor, so we’re going to dig in and see if we can get a good answer from the Thinkolator… don’t worry, I’ll be quick this time. I promise.

Tom Gardner was pitching this last week as a “I’ve decided to do something radical” idea — that they’ll slash the price for Motley Fool Stock Advisor, but still give you 30 days to request a full refund if you’re not satisfied with this “double down” stock idea. Which sounds pretty enticing, I suppose, but that’s exactly the same refund policy the Motley Fool has always had for their flagship newsletter (though in recent years they’ve also pitched their higher-end portfolio services much more heavily, and those are non-refundable)… and the teased $49 price is well off of their “retail price” of $199… but if you’re on their mailing list you’ll get a $49 offer for that newsletter and for Rule Breakers, their other “entry level” newsletter, pretty much once a week for the rest of your life. So there’s no rush.

What, then, is this “double down” stock they’re pitching? Here are our clues:

” I’ve stumbled upon an under-the-radar stock I believe could be one of the greatest discoveries of my 27 years as a professional investor.

I realize that’s a bold statement, so allow me to explain…

This small, California-based company is pioneering breakthrough technology that is enabling companies to move vast quantities of data over the Internet at lightning speeds.

And as the world has become more and more reliant on the Internet for everyday needs, this company has seen its revenue explode. The intense demand for this technology has helped the company race from zero to $1 billion in sales in just eight years.

In fact, many of technology’s biggest names – including Microsoft, Alphabet, and Amazon – are now loyal, paying customers of this company.”

And we’re told that he has recommended the stock a total of 12 times already…

“… we’ve already issued 12 separate “BUY” recommendations across the various investment research services I oversee here at The Motley Fool – and every single one of those recommendations has made investors money.”

So maybe it’s not a double down, but a tredecuple down? Doesn’t really roll off the tongue as well.

And then Gardner reiterates his personal dedication to the stock:

“Heck, I believe in this company so much, I even invited their CEO to Motley Fool Headquarters to personally tell her how much I believe in her company and why we were staking $523,111 of The Motley Fool’s own money on their stock.”

So who is it? Well, despite the seeming urgency of the pitch, Thinkolator says we’re looking at yet another Tom Gardner tease for Arista Networks (ANET).

Why Arista? Well, it is a cloud-focused networking equipment company, focused on the speedy movement of data… think Cisco (CSCO), but really focused on the biggest data center applications.

And it does have a female CEO in the pretty understated Jayshree Ullal, who was recruited from Cisco to get Arista going about a dozen years ago.

And we know that the Motley Fool has been investing in the stock, and that Tom Gardner himself had recommended it a bunch of times, with the first tease of this stock that I covered being almost exactly three years ago. Back then the Fool had invested, they say, $280,000 in the stock, but over the past couple years it has often been teased as the recipient of “$523,111” of the Fool’s corporate portfolio (unlike most newsletter publishers, the Motley Fool invests in a lot of their recommended companies).

The clues are all still a match — the “zero to $1 billion” in sales in eight years refers to Arista first product launch in 2008, and they hit that billion-dollar level for annual sales late in 2016.

Interestingly, given that we’ll hit the 12th anniversary of the bankruptcy of Lehman Brothers next week, Lehman was actually their first big customer — the first wave of demand for this faster internet and faster data movement was among the high frequency traders, who could benefit from getting their data or placing their orders even a few milliseconds faster than the competition, and then other big companies who want to speed up their data started coming aboard. For a while they were plagued by back-and-forth patent infringement and intellectual property theft lawsuits with Cisco, but they settled most of that a couple years ago (at least for the time being).

When I first looked at the stock in 2017 I summed it up as “hard to buy after a steep climb, but probably reasonably valued at a forward PE of 33 given the expectations of 20% earnings growth” — the stock has had some big ups and downs over the years since then, and I personally owned it for a while, but I recently sold out of my position. I’m not sure how Tom Gardner can say that none of his 12 recommendations of the stock are “losing,” since the shares have been a below the current $211 or so only twice in the past 2-1/2 years and he has teased it relentlessly for much of that time, but maybe he has only formally recommended it to Stock Advisor subscribers at below $210 a share — I don’t know. Or maybe he doesn’t consider it a loss if he hasn’t sold (the Fool almost never recommends a sell on a stock, which is why the Stock Advisor portfolio, last I heard, has a couple hundred positions — it has worked out well for them, for sure, but not much of their strong performance has come from Arista shares in the past few years).

So what to do now? Arista reported fairly unexciting earnings in early August (good, but with a weak outlook), and the stock had a rough month, down 15% or so as the management, on the last call, talked yet again about weak demand for their products in the near term. There’s a free Fool update about the stock here, if you’d like some recent perspective from one of their authors.

Analysts are actually fairly tepid on Arista in general, but they do estimate that after this year’s dip in both revenue and earnings, the company will resume growth — 2021 will still be worse than 2019 on the earnings front, but by 2022, they think, we’ll be headed upward again. They’re largely just guessing, of course, because Arista’s results have been quite uneven — they’ve really been beaten down in recent years by the reliance on just a few “cloud titan” companies who are their major customers, particularly Microsoft, and that has led to some very weak quarters when those big customers don’t place big orders… and while we’ve all been waiting for the eventual data center upgrade cycle, as more customers upgrade from 100G to 400G and require more high-end switches and, hopefully, lead to more market share gains thanks to Arista’s claimed technological lead over competitors. That upgrade cycle is apparently neither as dramatic nor os rapid as many of us expected a couple years ago, the delays seem largely to have been out of Arista’s control (mostly due to the lack of availability of optical equipment for mass-scale upgrades, it seems), but it has clearly hurt Arista’s revenue. Maybe that will turn at some point, it does seem inevitable that data centers will be continually upgrading… but it’s also possible that if it takes long enough, Cisco and the rest of the gang will have “caught up” with Arista. Most analysts call the stock a “hold” now, and the average target price is about $250, well below the $300+ price targets the stock had for much of 2018 and 2019 (price targets don’t really mean anything, but they can be a measure of analyst optimism).

Here’s what I wrote to the Irregulars after the latest Arista earnings call, in early August:

“Arista Networks (ANET) disappointed again. Not by missing estimates, but by failing to beat the very low estimates in a dramatic fashion. They did come in with revenue and earnings that were better than analysts had expected, though still down 15% or so from the year-ago period, and their forecast was also slightly better than analyst revenue forecasts… but that’s not good enough when other stocks are getting the attention for 20%, 30% or even higher revenue growth, and it seems that investors are gradually giving up on the idea that ANET can have another surge of revenue growth at all (revenue more than tripled over the past five years, but then has been falling for two quarters and the estimates of 10%ish revenue growth over the next couple years are not inspiring).

“On the positive side, Arista is slowly beginning to grow into its valuation now — they have become nicely profitable in recent years, and even with earnings shrinking this year the shares are trading at less than 25X forward earnings (probably about 30X 2020 earnings). That’s not cheap for a company that will probably grow earnings at 10-15% a year, but it’s not particularly expensive, either — I expect the question is really just whether investors trust those forecasts and the growth potential after a year or so of pretty steady disappointment. Part of the risk is that the delays in getting 400-gig optical networking upgrades into data centers means that Cisco and other providers have had time to “catch up” on the technology side to some degree (and on marketing their technology), and over the past few years the giant, lumbering Cisco has actually been a better investment than the nimble, disruptive technology leader Arista. Cisco isn’t growing this year, either, but they’re shrinking less than Arista… and they’re a lot cheaper, with a PE of 18 and a dividend yield of 3%, the problem is that analysts don’t think they’ll grow even half as much as Arista over the next couple years.

“I’ve been pretty consistently wrong about Arista, and I don’t really understand why, so that’s a signal that I probably shouldn’t be in the stock at all — I’ve decided to jettison this position, which was a small one anyway. This stock has been relentlessly promoted by Tom Gardner at the Motley Fool for years now, and partly that’s because he seems to be a huge fan of their CEO… maybe that works out in the end, but I’m going to take the hint and stop trying to figure this one out. Perhaps that makes this a contrarian opportunity, if I’m giving up maybe that means the stock is about to soar… you’ll have to make your own call, but sometimes stocks and trends just don’t work the way you expect them to, and when I hit a wall like this with a company that I think I understand but I am persistently wrong, well, then it’s time to move on. No sense driving myself crazy.”

But that’s just what I think, and what I’m doing with my money — when it comes to your money, of course, it’s your choices that matter… are you ready to buy into the Arista recovery? Think Tom Gardner will eventually be right about the huge potential for Jayshree Ullal’s company? Or are you skeptical that they’ll ever again have a meaningful burst of growth? Let us know with a comment below.

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Disclosure: Of the stocks mentioned above, I own shares of and/or call options on Amazon and Alphabet. I will not trade in any stock covered for at least three days after publication, per Stock Gumshoe’s trading rules.