ARROW ELECTRONICS INC (ARW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARW - US0427351004 - Common Stock
116.38 USD
-2.09 (-1.76%)
We assign a fundamental rating of 4 out of 10 to ARW. ARW was compared to 124 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.
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 (1.94%) which is in line with its industry peers.
- ARW has a Return On Equity of 7.43%. This is in the better half of the industry: ARW outperforms 65.32% of its industry peers.
- With a decent Return On Invested Capital value of 6.43%, ARW is doing good in the industry, outperforming 66.94% of the companies in the same industry.
- ARW had an Average Return On Invested Capital over the past 3 years of 12.62%. This is above the industry average of 8.83%.
- The 3 year average ROIC (12.62%) for ARW is well above the current ROIC(6.43%). The reason for the recent decline needs to be investigated.
| 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.
- The Operating Margin of ARW (2.79%) is comparable to the rest of the industry.
- ARW's Operating Margin has been stable in the last couple of years.
- ARW has a Gross Margin of 11.10%. This is in the lower half of the industry: ARW underperforms 78.23% 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%
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.
- The number of shares outstanding for ARW has been reduced compared to 1 year ago.
- ARW has less shares outstanding than it did 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 2.20 indicates that ARW is not a great score, but indicates only limited risk for bankruptcy at the moment.
- The Altman-Z score of ARW (2.20) is worse than 66.94% of its industry peers.
- The Debt to FCF ratio of ARW is 33.32, which is on the high side as it means it would take ARW, 33.32 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 33.32, ARW is in line with its industry, outperforming 50.00% of the companies in the same industry.
- ARW has a Debt/Equity ratio of 0.49. This is a healthy value indicating a solid balance between debt and equity.
- ARW has a worse Debt to Equity ratio (0.49) than 68.55% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 33.32 | ||
| Altman-Z | 2.2 |
ROIC/WACC0.55
WACC11.76%
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's Current ratio of 1.46 is on the low side compared to the rest of the industry. ARW is outperformed by 75.81% of its industry peers.
- A Quick Ratio of 1.14 indicates that ARW should not have too much problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 1.14, ARW is doing worse than 71.77% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.46 | ||
| Quick Ratio | 1.14 |
3. Growth
3.1 Past
- ARW shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -14.65%.
- ARW shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.45% yearly.
- Looking at the last year, ARW shows a small growth in Revenue. The Revenue has grown by 3.16% in the last year.
- The Revenue has been decreasing by -0.70% on average over the past years.
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.
- ARW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.45% yearly.
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.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 12.11, which indicates a correct valuation of ARW.
- Compared to the rest of the industry, the Price/Earnings ratio of ARW indicates a rather cheap valuation: ARW is cheaper than 89.52% of the companies listed in the same industry.
- ARW is valuated cheaply when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 9.75, which indicates a very decent valuation of ARW.
- Based on the Price/Forward Earnings ratio, ARW is valued cheaper than 94.35% of the companies in the same industry.
- ARW's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.11 | ||
| Fwd PE | 9.75 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, ARW is valued cheaply inside the industry as 91.13% of the companies are valued more expensively.
- ARW's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 63.82 | ||
| EV/EBITDA | 9.35 |
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)19.99
PEG (5Y)1.88
EPS Next 2Y7.91%
EPS Next 3Y10.88%
5. Dividend
5.1 Amount
- No dividends for ARW!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
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 12.11 and the Price/Book (PB) ratio is 0.94.