When you look at ARROW ELECTRONICS INC (NYSE:ARW), it's hard to ignore the strong fundamentals, especially considering its likely undervaluation.

ARROW ELECTRONICS INC (NYSE:ARW) is a hidden gem identified by our stock screening tool, featuring undervaluation and robust fundamentals. ARW showcases decent financial health and profitability, coupled with an attractive price. Let's dig deeper into the analysis.

Assessing Valuation for ARW

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. ARW scores a 7 out of 10:

• The Price/Earnings ratio is 9.81, which indicates a very decent valuation of ARW.
• 95.97% of the companies in the same industry are more expensive than ARW, based on the Price/Earnings ratio.
• ARW's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.59.
• The Price/Forward Earnings ratio is 9.78, which indicates a very decent valuation of ARW.
• Based on the Price/Forward Earnings ratio, ARW is valued cheaply inside the industry as 89.52% of the companies are valued more expensively.
• When comparing the Price/Forward Earnings ratio of ARW to the average of the S&P500 Index (21.35), we can say ARW is valued rather cheaply.
• ARW's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ARW is cheaper than 88.71% of the companies in the same industry.
• Compared to the rest of the industry, the Price/Free Cash Flow ratio of ARW indicates a rather cheap valuation: ARW is cheaper than 95.16% of the companies listed in the same industry.
• A more expensive valuation may be justified as ARW's earnings are expected to grow with 23.29% in the coming years.

Evaluating Profitability: ARW

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. ARW scores a 5 out of 10:

• ARW's Return On Equity of 6.81% is fine compared to the rest of the industry. ARW outperforms 64.52% of its industry peers.
• ARW has a Return On Invested Capital of 7.92%. This is in the better half of the industry: ARW outperforms 78.23% of its industry peers.
• The Average Return On Invested Capital over the past 3 years for ARW is above the industry average of 9.26%.
• The 3 year average ROIC (12.62%) for ARW is well above the current ROIC(7.92%). The reason for the recent decline needs to be investigated.

Evaluating Health: ARW

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. ARW has earned a 5 out of 10:

• The Debt to FCF ratio of ARW is 3.01, which is a good value as it means it would take ARW, 3.01 years of fcf income to pay off all of its debts.
• With a decent Debt to FCF ratio value of 3.01, ARW is doing good in the industry, outperforming 66.13% of the companies in the same industry.
• ARW has a Debt/Equity ratio of 0.48. This is a healthy value indicating a solid balance between debt and equity.

Deciphering ARW's Growth Rating

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. ARW boasts a 4 out of 10:

• ARW is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 23.29% yearly.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
• The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

More Decent Value stocks can be found in our Decent Value screener.

Our latest full fundamental report of ARW contains the most current fundamental analsysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.