Despite its impressive fundamentals,ARROW ELECTRONICS INC (NYSE:ARW) remains undervalued.

Consider ARROW ELECTRONICS INC (NYSE:ARW) as a top value stock, identified by our stock screening tool. ARW shines in terms of profitability, solvency, and liquidity, all while remaining very reasonably priced. Let's dive deeper into the analysis.

ChartMill's Evaluation of Valuation

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. ARW has achieved a 8 out of 10:

• ARW is valuated reasonably with a Price/Earnings ratio of 11.98.
• Based on the Price/Earnings ratio, ARW is valued cheaply inside the industry as 91.20% of the companies are valued more expensively.
• The average S&P500 Price/Earnings ratio is at 23.99. ARW is valued rather cheaply when compared to this.
• Based on the Price/Forward Earnings ratio of 7.36, the valuation of ARW can be described as very cheap.
• Based on the Price/Forward Earnings ratio, ARW is valued cheaply inside the industry as 97.60% of the companies are valued more expensively.
• Compared to an average S&P500 Price/Forward Earnings ratio of 20.35, ARW is valued rather cheaply.
• Based on the Enterprise Value to EBITDA ratio, ARW is valued cheaply inside the industry as 88.00% of the companies are valued more expensively.
• 95.20% of the companies in the same industry are more expensive than ARW, based on the Price/Free Cash Flow ratio.
• ARW's earnings are expected to grow with 23.29% in the coming years. This may justify a more expensive valuation.

Profitability Examination for ARW

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, ARW has achieved a 5:

• ARW's Return On Equity of 6.55% is fine compared to the rest of the industry. ARW outperforms 64.00% of its industry peers.
• With a decent Return On Invested Capital value of 7.54%, ARW is doing good in the industry, outperforming 75.20% of the companies in the same industry.
• The Average Return On Invested Capital over the past 3 years for ARW is above the industry average of 9.32%.
• 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.

Assessing Health Metrics for ARW

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. ARW scores a 5 out of 10:

• 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 better Debt to FCF ratio (2.87) than 68.80% 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.

What does the Growth looks like for ARW

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. ARW has received a 4 out of 10:

• Based on estimates for the next years, ARW will show a very strong growth in Earnings Per Share. The EPS will grow by 23.29% on average per year.
• 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.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Check the latest full fundamental report of ARW for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.