ARROW ELECTRONICS INC (ARW) Stock Fundamental Analysis

USA • New York Stock Exchange • NYSE:ARW • US0427351004

133.455 USD

+0.55 (+0.41%)

Last: Jan 30, 2026, 12:04 PM

Fundamental Rating

ARW gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals 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

1.1 Basic Checks

In the past year ARW was profitable.
ARW had a positive operating cash flow in the past year.
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's Return On Assets of 1.94% is in line compared to the rest of the industry. ARW outperforms 59.35% of its industry peers.
The Return On Equity of ARW (7.43%) is better than 65.04% of its industry peers.
ARW has a Return On Invested Capital of 6.43%. This is in the better half of the industry: ARW outperforms 65.85% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ARW is above the industry average of 8.82%.
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 of 1.62%. This is comparable to the rest of the industry: ARW outperforms 55.28% of 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.
Looking at the Gross Margin, with a value of 11.10%, ARW is doing worse than 78.05% of the companies in the same industry.
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

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

2.2 Solvency

ARW has an Altman-Z score of 2.23. 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.
Looking at the Altman-Z score, with a value of 2.23, ARW is doing worse than 63.41% of the companies in the same industry.
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.
With a Debt to FCF ratio value of 33.32, ARW perfoms like the industry average, outperforming 50.41% 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.
The Debt to Equity ratio of ARW (0.49) is worse than 67.48% of its industry peers.

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

ROIC/WACC0.85

WACC7.59%

2.3 Liquidity

A Current Ratio of 1.46 indicates that ARW should not have too much problems paying 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 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.
ARW has a Quick ratio of 1.14. This is in the lower half of the industry: ARW underperforms 71.54% of its industry peers.

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

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

ARW is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.01% yearly.
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

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.
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

Based on the Price/Earnings ratio of 13.89, the valuation of ARW can be described as correct.
Based on the Price/Earnings ratio, ARW is valued cheaply inside the industry as 87.80% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 28.39, ARW is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 11.18, the valuation of ARW can be described as reasonable.
ARW's Price/Forward Earnings ratio is rather cheap when compared to the industry. ARW is cheaper than 91.06% 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 25.72.

		Industry Rank	Sector Rank
PE	13.89
Fwd PE	11.18

4.2 Price Multiples

88.62% of the companies in the same industry are more expensive than ARW, based on the Enterprise Value to EBITDA ratio.
ARW's Price/Free Cash Flow is on the same level as the industry average.

		Industry Rank	Sector Rank
P/FCF	73.18
EV/EBITDA	10.13

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.