Overall ARW gets a fundamental rating of 4 out of 10. We evaluated ARW against 123 industry peers in the Electronic Equipment, Instruments & Components industry. Both the profitability and the financial health of ARW get a neutral evaluation. Nothing too spectacular is happening here. ARW is not valued too expensively and it also shows a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year ARW was profitable.
In the past year ARW had a positive cash flow from operations.
In the past 5 years ARW has always been profitable.
ARW had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

ARW has a Return On Assets of 1.94%. This is comparable to the rest of the industry: ARW outperforms 59.35% of its industry peers.
ARW's Return On Equity of 7.43% is fine compared to the rest of the industry. ARW outperforms 65.04% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.43%, ARW is in the better half of the industry, outperforming 65.85% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ARW is above the industry average of 8.81%.
The last Return On Invested Capital (6.43%) for ARW is well below the 3 year average (12.62%), which needs to be investigated, but indicates that ARW had better years and this may not be a problem.

		Industry Rank	Sector Rank
ROA	1.94%
ROE	7.43%
ROIC	6.43%

ROA(3y)4.17%

ROA(5y)4.32%

ROE(3y)16.03%

ROE(5y)16.11%

ROIC(3y)12.62%

ROIC(5y)12.42%

1.3 Margins

ARW has a Profit Margin (1.62%) which is in line with its industry peers.
ARW's Profit Margin has declined in the last couple of years.
With a Operating Margin value of 2.79%, ARW perfoms like the industry average, outperforming 55.28% of the companies in the same industry.
ARW's Operating Margin has been stable in the last couple of years.
ARW has a worse Gross Margin (11.10%) than 78.05% of its industry peers.
In the last couple of years the Gross Margin of ARW has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	2.79%
PM (TTM)	1.62%
GM	11.1%

OM growth 3Y-10.54%

OM growth 5Y0.58%

PM growth 3Y-24.12%

PM growth 5YN/A

GM growth 3Y-1.1%

GM growth 5Y0.67%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ARW is still creating some value.
Compared to 1 year ago, ARW has less shares outstanding
The number of shares outstanding for ARW has been reduced compared to 5 years ago.
The debt/assets ratio for ARW has been reduced compared to a year ago.

2.2 Solvency

An Altman-Z score of 2.23 indicates that ARW is not a great score, but indicates only limited risk for bankruptcy at the moment.
ARW has a worse Altman-Z score (2.23) than 63.41% of its industry peers.
ARW has a debt to FCF ratio of 33.32. This is a negative value and a sign of low solvency as ARW would need 33.32 years to pay back of all of its debts.
ARW has a Debt to FCF ratio (33.32) which is in line with its industry peers.
A Debt/Equity ratio of 0.49 indicates that ARW is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.49, ARW is not doing good in the industry: 67.48% of the companies in the same industry are doing better.

		Industry Rank	Sector Rank
Debt/Equity	0.49
Debt/FCF	33.32
Altman-Z	2.23

ROIC/WACC0.85

WACC7.6%

2.3 Liquidity

ARW has a Current Ratio of 1.46. This is a normal value and indicates that ARW is financially healthy and should not expect problems in meeting its short term obligations.
ARW has a worse Current ratio (1.46) than 76.42% of its industry peers.
ARW has a Quick Ratio of 1.14. This is a normal value and indicates that ARW is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.14, ARW is doing worse than 71.54% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	1.46
Quick Ratio	1.14

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The earnings per share for ARW have decreased strongly by -14.65% in the last year.
Measured over the past 5 years, ARW shows a small growth in Earnings Per Share. The EPS has been growing by 6.45% on average per year.
The Revenue has been growing slightly by 3.16% in the past year.
ARW shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.70% yearly.

EPS 1Y (TTM)-14.65%

EPS 3Y-13.05%

EPS 5Y6.45%

EPS Q2Q%1.26%

Revenue 1Y (TTM)3.16%

Revenue growth 3Y-6.79%

Revenue growth 5Y-0.7%

Sales Q2Q%13.03%

3.2 Future

Based on estimates for the next years, ARW will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.01% on average per year.
Based on estimates for the next years, ARW will show a small growth in Revenue. The Revenue will grow by 5.45% on average per year.

EPS Next Y0.61%

EPS Next 2Y7.91%

EPS Next 3Y10.88%

EPS Next 5Y11.01%

Revenue Next Year9.27%

Revenue Next 2Y6.75%

Revenue Next 3Y6.26%

Revenue Next 5Y5.45%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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4. Valuation

4.1 Price/Earnings Ratio

ARW is valuated correctly with a Price/Earnings ratio of 13.79.
Based on the Price/Earnings ratio, ARW is valued cheaper than 87.80% of the companies in the same industry.
When comparing the Price/Earnings ratio of ARW to the average of the S&P500 Index (28.30), we can say ARW is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 11.10, the valuation of ARW can be described as reasonable.
Based on the Price/Forward Earnings ratio, ARW is valued cheaply inside the industry as 91.06% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of ARW to the average of the S&P500 Index (25.57), we can say ARW is valued rather cheaply.

		Industry Rank	Sector Rank
PE	13.79
Fwd PE	11.1

4.2 Price Multiples

ARW's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ARW is cheaper than 88.62% of the companies in the same industry.
ARW's Price/Free Cash Flow ratio is in line with the industry average.

		Industry Rank	Sector Rank
P/FCF	72.65
EV/EBITDA	10.13

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.

PEG (NY)22.76

PEG (5Y)2.14

EPS Next 2Y7.91%

EPS Next 3Y10.88%

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5. Dividend

5.1 Amount

No dividends for ARW!.

		Industry Rank	Sector Rank
Dividend Yield	0%

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ARROW ELECTRONICS INC / ARW FAQ

What is the fundamental rating for ARW stock?

ChartMill assigns a fundamental rating of 4 / 10 to ARW.

What is the valuation status for ARW stock?

ChartMill assigns a valuation rating of 5 / 10 to ARROW ELECTRONICS INC (ARW). This can be considered as Fairly Valued.

Can you provide the profitability details for ARROW ELECTRONICS INC?

ARROW ELECTRONICS INC (ARW) has a profitability rating of 5 / 10.

Can you provide the PE and PB ratios for ARW stock?

The Price/Earnings (PE) ratio for ARROW ELECTRONICS INC (ARW) is 13.79 and the Price/Book (PB) ratio is 1.07.