Arista Networks, Inc. (ANET) vs Alphabet Inc. (GOOGL): Which Is the Better Buy in 2026?
As of 2026-06-19, ANET is overvalued at $170, with a DCF intrinsic value of $151 and a margin of safety of -13%. GOOGL is overvalued at $368, with an intrinsic value of $94 and a margin of safety of -290%. Of the two, ANET has the wider margin of safety.
Rewards
- ★Gross margin of 63.5% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Arista Networks, Inc. scores 93/100 on the Economic Moat Score (Wide Moat), with reinvestment efficiency as the strongest competitive dimension.
- ★Free cash flow has grown at a 111.7% CAGR over the past 4 years, demonstrating strong earnings power growth.
- ★Alphabet Inc. has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★Gross margin of 60.4% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Alphabet Inc. scores 89/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.
Risks
- ⚠Buybacks have been poorly timed — 3 out of 4 years involved repurchases at relatively expensive valuations.
- ⚠FCF yield of 2.0% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠Trailing P/E of 58.3x is 48% above the historical average of 39.5x — the stock trades at a premium to its own history.
- ⚠FCF yield of 1.6% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $170?
The market implies +22.1% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding +19.1%, reflecting heavy growth investment expected to generate future returns.
What growth rate is the market pricing in at $368?
Market pricing in significantly higher growth than history — aggressive.
Economic Moat Score
Learn more →Wide moat with strength across all dimensions. Reinvestment Efficiency is the standout factor.
Wide moat driven primarily by roic consistency. Reinvestment Efficiency is the area most vulnerable to competitive pressure.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is optimistic — be cautious and ensure you have a margin of safety"
"Market is pricing this stock without strong emotion in either direction"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: ANET vs GOOGL
Is Arista Networks, Inc. or Alphabet Inc. more undervalued in 2026?▼
Based on our discounted cash flow model, ANET trades at a -12.7% margin of safety (intrinsic value $151 vs. price $170), compared to GOOGL's -289.6% margin of safety (intrinsic $94 vs. $368).
Which stock has a wider economic moat, Arista Networks, Inc. or Alphabet Inc.?▼
ANET scores 93/100 (Wide moat), while GOOGL scores 89/100 (Wide moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Alphabet Inc. in financial distress?▼
GOOGL's Altman Z-Score of 2.4 places it in the Grey zone, signaling elevated bankruptcy risk. ANET scores 16.4 (Safe zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.
Which company has better free cash flow, Arista Networks, Inc. or Alphabet Inc.?▼
Arista Networks, Inc. (ANET) generates a 2.0% free cash flow yield, compared to Alphabet Inc.'s 1.6%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.