ARROW ELECTRONICS INC (ARW) Stock Fundamental Analysis
NYSE:ARW - New York Stock Exchange, Inc. - US0427351004 - Common Stock - Currency: USD
ARW gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 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. A decent growth rate in combination with a cheap valuation! Better keep an eye on ARW. With these ratings, ARW could be worth investigating further for value investing!.
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.
Of the past 5 years ARW 4 years had a positive operating cash flow.
1.2 Ratios
ARW has a Return On Assets (1.80%) which is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 6.81%, ARW is in the better half of the industry, outperforming 63.33% of the companies in the same industry.
ARW has a Return On Invested Capital of 7.92%. This is in the better half of the industry: ARW outperforms 75.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ARW is above the industry average of 8.95%.
The last Return On Invested Capital (7.92%) 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 | 1.8% | ||
| ROE | 6.81% | ||
| ROIC | 7.92% |
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
The Profit Margin of ARW (1.40%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of ARW has declined.
Looking at the Operating Margin, with a value of 3.26%, ARW is in line with its industry, outperforming 57.50% of the companies in the same industry.
In the last couple of years the Operating Margin of ARW has remained more or less at the same level.
ARW has a worse Gross Margin (11.79%) than 75.00% of its industry peers.
ARW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.26% | ||
| PM (TTM) | 1.4% | ||
| GM | 11.79% |
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
ARW has an Altman-Z score of 2.34. This is not the best score and indicates that ARW is in the grey zone with still only limited risk for bankruptcy at the moment.
ARW's Altman-Z score of 2.34 is on the low side compared to the rest of the industry. ARW is outperformed by 60.00% of its industry peers.
ARW has a debt to FCF ratio of 3.01. This is a good value and a sign of high solvency as ARW would need 3.01 years to pay back of all of its debts.
ARW has a better Debt to FCF ratio (3.01) than 65.00% of its industry peers.
A Debt/Equity ratio of 0.48 indicates that ARW is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.48, ARW is doing worse than 70.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.48 | ||
| Debt/FCF | 3.01 | ||
| Altman-Z | 2.34 |
ROIC/WACC0.98
WACC8.06%
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 77.50% of its industry peers.
ARW has a Quick Ratio of 1.08. 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 Quick ratio of 1.08. This is in the lower half of the industry: ARW underperforms 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.46 | ||
| Quick Ratio | 1.08 |
3. Growth
3.1 Past
The earnings per share for ARW have decreased strongly by -40.02% 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.
ARW shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -15.66%.
ARW shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.70% yearly.
EPS 1Y (TTM)-40.02%
EPS 3Y-13.05%
EPS 5Y6.45%
EPS Q2Q%-25.38%
Revenue 1Y (TTM)-15.66%
Revenue growth 3Y-6.79%
Revenue growth 5Y-0.7%
Sales Q2Q%-7.21%
3.2 Future
The Earnings Per Share is expected to grow by 26.42% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 5.25% on average over the next years.
EPS Next Y2.26%
EPS Next 2Y24.67%
EPS Next 3Y26.42%
EPS Next 5YN/A
Revenue Next Year1.82%
Revenue Next 2Y5.25%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
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.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 10.86, the valuation of ARW can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of ARW indicates a rather cheap valuation: ARW is cheaper than 95.83% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 29.63. ARW is valued rather cheaply when compared to this.
ARW is valuated reasonably with a Price/Forward Earnings ratio of 10.62.
Based on the Price/Forward Earnings ratio, ARW is valued cheaply inside the industry as 94.17% of the companies are valued more expensively.
ARW is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.86 | ||
| Fwd PE | 10.62 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ARW indicates a rather cheap valuation: ARW is cheaper than 90.83% of the companies listed 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 95.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.6 | ||
| EV/EBITDA | 8.18 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ARW does not grow enough to justify the current Price/Earnings ratio.
A more expensive valuation may be justified as ARW's earnings are expected to grow with 26.42% in the coming years.
PEG (NY)4.8
PEG (5Y)1.69
EPS Next 2Y24.67%
EPS Next 3Y26.42%
5. Dividend
5.1 Amount
No dividends for ARW!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
111.35
-0.84 (-0.75%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners107.23%
Inst Owner Change1.67%
Ins Owners0.73%
Ins Owner Change6.83%
Market Cap5.81B
Analysts52
Price Target120.58 (8.29%)
Short Float %6.23%
Short Ratio6.66
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.07%
Min EPS beat(2)6.15%
Max EPS beat(2)11.98%
EPS beat(4)4
Avg EPS beat(4)8.27%
Min EPS beat(4)0.8%
Max EPS beat(4)14.14%
EPS beat(8)7
Avg EPS beat(8)7.09%
EPS beat(12)10
Avg EPS beat(12)6.29%
EPS beat(16)14
Avg EPS beat(16)8.87%
Revenue beat(2)2
Avg Revenue beat(2)1.27%
Min Revenue beat(2)0.39%
Max Revenue beat(2)2.14%
Revenue beat(4)3
Avg Revenue beat(4)1.12%
Min Revenue beat(4)-2.69%
Max Revenue beat(4)4.65%
Revenue beat(8)4
Avg Revenue beat(8)-0.17%
Revenue beat(12)5
Avg Revenue beat(12)-0.04%
Revenue beat(16)7
Avg Revenue beat(16)0.05%
PT rev (1m)0.8%
PT rev (3m)-2.65%
EPS NQ rev (1m)-28.4%
EPS NQ rev (3m)-47.93%
EPS NY rev (1m)-18.16%
EPS NY rev (3m)-18.16%
Revenue NQ rev (1m)-1.74%
Revenue NQ rev (3m)-8.56%
Revenue NY rev (1m)-0.18%
Revenue NY rev (3m)0.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.86 | ||
| Fwd PE | 10.62 | ||
| P/S | 0.21 | ||
| P/FCF | 5.6 | ||
| P/OCF | 5.14 | ||
| P/B | 1.01 | ||
| P/tB | 1.61 | ||
| EV/EBITDA | 8.18 |
EPS(TTM)10.25
EY9.21%
EPS(NY)10.48
Fwd EY9.41%
FCF(TTM)19.89
FCFY17.86%
OCF(TTM)21.67
OCFY19.46%
SpS535.24
BVpS110.43
TBVpS69.18
PEG (NY)4.8
PEG (5Y)1.69
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.8% | ||
| ROE | 6.81% | ||
| ROCE | 9.99% | ||
| ROIC | 7.92% | ||
| ROICexc | 8.09% | ||
| ROICexgc | 10.65% | ||
| OM | 3.26% | ||
| PM (TTM) | 1.4% | ||
| GM | 11.79% | ||
| FCFM | 3.72% |
ROA(3y)4.17%
ROA(5y)4.32%
ROE(3y)16.03%
ROE(5y)16.11%
ROIC(3y)12.62%
ROIC(5y)12.42%
ROICexc(3y)12.88%
ROICexc(5y)12.75%
ROICexgc(3y)16.8%
ROICexgc(5y)17.19%
ROCE(3y)16.81%
ROCE(5y)16.22%
ROICexcg growth 3Y-21.09%
ROICexcg growth 5Y-3.76%
ROICexc growth 3Y-19.55%
ROICexc growth 5Y-2.39%
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%
F-Score5
Asset Turnover1.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.48 | ||
| Debt/FCF | 3.01 | ||
| Debt/EBITDA | 2.58 | ||
| Cap/Depr | 56.88% | ||
| Cap/Sales | 0.33% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 105.21% | ||
| Profit Quality | 264.67% | ||
| Current Ratio | 1.46 | ||
| Quick Ratio | 1.08 | ||
| Altman-Z | 2.34 |
F-Score5
WACC8.06%
ROIC/WACC0.98
Cap/Depr(3y)48.3%
Cap/Depr(5y)50.65%
Cap/Sales(3y)0.27%
Cap/Sales(5y)0.29%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-40.02%
EPS 3Y-13.05%
EPS 5Y6.45%
EPS Q2Q%-25.38%
EPS Next Y2.26%
EPS Next 2Y24.67%
EPS Next 3Y26.42%
EPS Next 5YN/A
Revenue 1Y (TTM)-15.66%
Revenue growth 3Y-6.79%
Revenue growth 5Y-0.7%
Sales Q2Q%-7.21%
Revenue Next Year1.82%
Revenue Next 2Y5.25%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-41.39%
EBIT growth 3Y-16.61%
EBIT growth 5Y-0.12%
EBIT Next Year28.42%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y66.79%
FCF growth 3Y45.64%
FCF growth 5Y7.97%
OCF growth 1Y60.24%
OCF growth 3Y39.21%
OCF growth 5Y5.67%