ARROW ELECTRONICS INC (ARW) Stock Fundamental Analysis
NYSE:ARW - New York Stock Exchange, Inc. - US0427351004 - Common Stock - Currency: USD
Overall ARW gets a fundamental rating of 5 out of 10. We evaluated ARW against 125 industry peers in the Electronic Equipment, Instruments & Components industry. ARW has only an average score on both its financial health and profitability. ARW is valued quite cheap, while showing a decent growth score. This is a good combination! 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.
ARW had a positive operating cash flow in the past year.
ARW had positive earnings in each of the past 5 years.
Of the past 5 years ARW 4 years had a positive operating cash flow.
1.2 Ratios
The Return On Assets of ARW (1.81%) is comparable to the rest of the industry.
ARW has a Return On Equity of 6.55%. This is in the better half of the industry: ARW outperforms 65.60% of its industry peers.
ARW has a better Return On Invested Capital (7.54%) than 77.60% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ARW is above the industry average of 9.30%.
The 3 year average ROIC (12.62%) for ARW is well above the current ROIC(7.54%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.81% | ||
| ROE | 6.55% | ||
| ROIC | 7.54% |
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 (1.40%) which is in line with its industry peers.
In the last couple of years the Profit Margin of ARW has declined.
ARW has a Operating Margin (3.07%) which is in line with its industry peers.
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 (11.54%) than 75.20% 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 | 3.07% | ||
| PM (TTM) | 1.4% | ||
| GM | 11.54% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), ARW is creating some value.
Compared to 1 year ago, ARW has less shares outstanding
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
An Altman-Z score of 2.40 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 (2.40) than 67.20% of its industry peers.
ARW has a debt to FCF ratio of 2.87. This is a good value and a sign of high solvency as ARW would need 2.87 years to pay back of all of its debts.
ARW has a Debt to FCF ratio of 2.87. This is in the better half of the industry: ARW outperforms 71.20% of its industry peers.
ARW has a Debt/Equity ratio of 0.42. This is a healthy value indicating a solid balance between debt and equity.
ARW has a worse Debt to Equity ratio (0.42) than 64.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 2.87 | ||
| Altman-Z | 2.4 |
ROIC/WACC0.91
WACC8.28%
2.3 Liquidity
A Current Ratio of 1.43 indicates that ARW should not have too much problems paying its short term obligations.
ARW has a Current ratio of 1.43. This is in the lower half of the industry: ARW underperforms 78.40% of its industry peers.
ARW has a Quick Ratio of 1.05. 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 Quick ratio of 1.05 is on the low side compared to the rest of the industry. ARW is outperformed by 77.60% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.43 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
The earnings per share for ARW have decreased strongly by -35.30% 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 for ARW has decreased by -11.13% in the past year. This is quite bad
The Revenue has been decreasing by -0.70% on average over the past years.
EPS 1Y (TTM)-35.3%
EPS 3Y-13.05%
EPS 5Y6.45%
EPS Q2Q%-25.31%
Revenue 1Y (TTM)-11.13%
Revenue growth 3Y-6.79%
Revenue growth 5Y-0.7%
Sales Q2Q%-1.59%
3.2 Future
ARW is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 24.41% yearly.
Based on estimates for the next years, ARW will show a small growth in Revenue. The Revenue will grow by 6.95% on average per year.
EPS Next Y1.91%
EPS Next 2Y21.77%
EPS Next 3Y24.41%
EPS Next 5YN/A
Revenue Next Year5.23%
Revenue Next 2Y5.58%
Revenue Next 3Y6.95%
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
The Price/Earnings ratio is 13.69, which indicates a correct valuation of ARW.
ARW's Price/Earnings ratio is rather cheap when compared to the industry. ARW is cheaper than 92.00% of the companies in the same industry.
ARW is valuated rather cheaply when we compare the Price/Earnings ratio to 27.28, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 8.68, which indicates a very decent valuation of ARW.
96.80% of the companies in the same industry are more expensive than ARW, based on the Price/Forward Earnings ratio.
ARW is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.69 | ||
| Fwd PE | 8.68 |
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 91.20% of the companies listed in the same industry.
ARW's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ARW is cheaper than 94.40% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.91 | ||
| EV/EBITDA | 9.17 |
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.
ARW's earnings are expected to grow with 24.41% in the coming years. This may justify a more expensive valuation.
PEG (NY)7.16
PEG (5Y)2.12
EPS Next 2Y21.77%
EPS Next 3Y24.41%
5. Dividend
5.1 Amount
No dividends for ARW!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
131.94
+2.18 (+1.68%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners107.32%
Inst Owner Change-0.59%
Ins Owners0.61%
Ins Owner Change4.99%
Market Cap6.84B
Analysts50
Price Target118.86 (-9.91%)
Short Float %7.86%
Short Ratio7.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
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)18.13%
Min EPS beat(2)11.98%
Max EPS beat(2)24.28%
EPS beat(4)4
Avg EPS beat(4)14.14%
Min EPS beat(4)6.15%
Max EPS beat(4)24.28%
EPS beat(8)7
Avg EPS beat(8)9.96%
EPS beat(12)10
Avg EPS beat(12)6.83%
EPS beat(16)14
Avg EPS beat(16)8.99%
Revenue beat(2)2
Avg Revenue beat(2)4.45%
Min Revenue beat(2)2.14%
Max Revenue beat(2)6.75%
Revenue beat(4)4
Avg Revenue beat(4)3.48%
Min Revenue beat(4)0.39%
Max Revenue beat(4)6.75%
Revenue beat(8)4
Avg Revenue beat(8)0.62%
Revenue beat(12)5
Avg Revenue beat(12)0.26%
Revenue beat(16)7
Avg Revenue beat(16)0.23%
PT rev (1m)-1.46%
PT rev (3m)-1.43%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.55%
EPS NY rev (1m)0%
EPS NY rev (3m)1.56%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)6.46%
Revenue NY rev (1m)1.72%
Revenue NY rev (3m)5.56%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.69 | ||
| Fwd PE | 8.68 | ||
| P/S | 0.25 | ||
| P/FCF | 6.91 | ||
| P/OCF | 6.34 | ||
| P/B | 1.16 | ||
| P/tB | 1.82 | ||
| EV/EBITDA | 9.17 |
EPS(TTM)9.64
EY7.31%
EPS(NY)15.2
Fwd EY11.52%
FCF(TTM)19.1
FCFY14.48%
OCF(TTM)20.8
OCFY15.76%
SpS536.21
BVpS114.23
TBVpS72.39
PEG (NY)7.16
PEG (5Y)2.12
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.81% | ||
| ROE | 6.55% | ||
| ROCE | 9.71% | ||
| ROIC | 7.54% | ||
| ROICexc | 7.74% | ||
| ROICexgc | 10.3% | ||
| OM | 3.07% | ||
| PM (TTM) | 1.4% | ||
| GM | 11.54% | ||
| FCFM | 3.56% |
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 Turnover1.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 2.87 | ||
| Debt/EBITDA | 2.46 | ||
| Cap/Depr | 56.12% | ||
| Cap/Sales | 0.32% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 106.65% | ||
| Profit Quality | 255.22% | ||
| Current Ratio | 1.43 | ||
| Quick Ratio | 1.05 | ||
| Altman-Z | 2.4 |
F-Score5
WACC8.28%
ROIC/WACC0.91
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)-35.3%
EPS 3Y-13.05%
EPS 5Y6.45%
EPS Q2Q%-25.31%
EPS Next Y1.91%
EPS Next 2Y21.77%
EPS Next 3Y24.41%
EPS Next 5YN/A
Revenue 1Y (TTM)-11.13%
Revenue growth 3Y-6.79%
Revenue growth 5Y-0.7%
Sales Q2Q%-1.59%
Revenue Next Year5.23%
Revenue Next 2Y5.58%
Revenue Next 3Y6.95%
Revenue Next 5YN/A
EBIT growth 1Y-37.31%
EBIT growth 3Y-16.61%
EBIT growth 5Y-0.12%
EBIT Next Year13%
EBIT Next 3Y18.46%
EBIT Next 5YN/A
FCF growth 1Y218.26%
FCF growth 3Y45.64%
FCF growth 5Y7.97%
OCF growth 1Y176%
OCF growth 3Y39.21%
OCF growth 5Y5.67%