Arrow Electronics, Inc. (ARW)
Valuation Overview•Is Arrow Electronics, Inc. Overvalued or Undervalued?
Trading at a relative discount to industry peers, suggesting a specific risk premium is applied.
Fragile underlying quality score of 45/100; weak margins or elevated debt leverage warrant caution.
Analysts remain cautious, with consensus price targets indicating limited room for upside expansion.
Verdict: Average quality business weighed down by significant profitability concerns.
Wall Street is cautious, forecasting potential downside alongside robust expected earnings growth. However, capital return yields remain modest, driven predominantly by aggressive share repurchases.
Returns capital exclusively via buybacks — no active dividend
ARW struggles with subpar profitability and pressured margins. This is paired with a moderately leveraged but stable balance sheet.
The company is facing top-line contraction (-6.0% 3Y CAGR) however, earnings have severely contracted over the same period. However, profitability remains a major concern with severely compressed operating margins (3.3%).
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $9.5B | +10.5% | -6.0% | +1.5% | +2.9% | |
| EBITDA | $434.3M | — | -21.9% | — | — | |
| Net Income | $235.1M | +45.7% | -26.3% | — | +1.4% | |
| EPS (Diluted) | $4.55 | +49.9% | -20.6% | +8.0% | +7.7% | |
| Free Cash Flow | $667.6M | -103.6% | +30.7% | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 11.2% | 11.9% | 12.2% | 12.2% |
| Operating Margin | 3.3% | 3.4% | 4.1% | 3.5% |
| Net Margin | 2.2% | 2.0% | 2.6% | 2.0% |
| FCF Margin | 1.1% | 1.8% | 1.2% | 1.4% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $2.92 | $5.22 | +78.8% | ||
| Q1'26 | $3.55 | $4.39 | +23.7% | ||
| Q4'25 | $2.28 | $2.41 | +5.7% | ||
| Q3'25 | $2.03 | $2.43 | +19.7% | ||
| Q2'25 | $1.47 | $1.80 | +22.4% | ||
| Q1'25 | $2.80 | $2.97 | +6.1% | ||
| Q4'24 | $2.22 | $2.38 | +7.2% | ||
| Q3'24 | $2.16 | $2.49 | +15.3% |
Total return is +88.4% (1Y), outperforming the benchmark by +63.4%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +105.9% | +96.6% | — |
| 1Y | +88.4% | +63.4% | — |
| 3YCAGR | +19.0% | -1.7% | — |
| 5YCAGR | +16.0% | +2.1% | — |
| 10YCAGR | +13.3% | -0.5% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Arrow Electronics, Inc. (ARW) valuation, health, and returns.
Arrow Electronics, Inc. is estimated to be fairly valued under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. trading near fair value (DCF: $0.00)
Arrow Electronics, Inc. has multiple valuation anchors: DCF Intrinsic Value: $0.00 | Peer Relative Fair Value: $301.17 | Wall Street Analyst Target: $215.00 (implying -7.6% upside). A convergence of these signals offers higher conviction.
Arrow Electronics, Inc. displays fair financial health with a composite quality score of 45/100, supported by a Altman Z-Score of 2.0 (grey zone), Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of 7.6%.
Arrow Electronics, Inc. returns capital via buybacks instead of dividends, carrying a 1.4% buyback yield and reducing outstanding shares by -2.9% in the last 12 months.
Arrow Electronics, Inc.'s current growth trajectory is Accelerating. The company achieved +10.5% 1Y revenue growth and +49.9% 1Y EPS growth, compared to its 3Y revenue CAGR of -6.0%.
Wall Street consensus is Hold based on 17 analysts, beating EPS expectations in 100% of recent quarters with a 24-quarter streak. The consensus price target represents a -7.6% change from current levels.
Investment risks for Arrow Electronics, Inc. include: -23.5% 1-year max drawdown, high beta (1.40x market volatility). Volatility risk is characterized by a beta of 1.40x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.