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 scores decently on growth, while it is valued quite cheap. This could make an interesting combination. With these ratings, ARW could be worth investigating further for value investing!.
1. Profitability
1.1 Basic Checks
ARW had positive earnings in the past year.
ARW had a positive operating cash flow in the past year.
Each year in the past 5 years ARW has been profitable.
ARW had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
ARW has a Return On Assets (1.81%) which is in line with its industry peers.
With a decent Return On Equity value of 6.55%, ARW is doing good in the industry, outperforming 65.60% of the companies in the same industry.
ARW has a Return On Invested Capital of 7.54%. This is in the better half of the industry: ARW outperforms 75.20% of its industry peers.
ARW had an Average Return On Invested Capital over the past 3 years of 12.62%. This is above the industry average of 9.29%.
The last Return On Invested Capital (7.54%) 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 | 1.81% | ||
| 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
Looking at the Profit Margin, with a value of 1.40%, ARW is in line with its industry, outperforming 56.80% of the companies in the same industry.
ARW's Profit Margin has declined in the last couple of years.
ARW's Operating Margin of 3.07% is in line compared to the rest of the industry. ARW outperforms 57.60% of 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 73.60% of its industry peers.
ARW's Gross Margin has been stable in the last couple of years.
| 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.
ARW has less shares outstanding than it did 1 year ago.
The number of shares outstanding for ARW has been reduced compared to 5 years ago.
ARW has a better debt/assets ratio than last year.
2.2 Solvency
ARW has an Altman-Z score of 2.37. 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 has a worse Altman-Z score (2.37) than 62.40% of its industry peers.
The Debt to FCF ratio of ARW is 2.87, which is a good value as it means it would take ARW, 2.87 years of fcf income to pay off all of its debts.
ARW's Debt to FCF ratio of 2.87 is fine compared to the rest of the industry. ARW outperforms 70.40% 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 64.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 2.87 | ||
| Altman-Z | 2.37 |
ROIC/WACC0.84
WACC8.99%
2.3 Liquidity
ARW has a Current Ratio of 1.43. 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 (1.43) than 76.80% 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 has a worse Quick ratio (1.05) than 74.40% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.43 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
ARW shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -35.30%.
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 -11.13%.
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)-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
The Earnings Per Share is expected to grow by 24.41% on average over the next years. This is a very strong growth
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 2Y22.06%
EPS Next 3Y24.41%
EPS Next 5YN/A
Revenue Next Year3.45%
Revenue Next 2Y5.07%
Revenue Next 3Y6.95%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 12.51, which indicates a correct valuation of ARW.
Based on the Price/Earnings ratio, ARW is valued cheaper than 90.40% of the companies in the same industry.
ARW's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.60.
ARW is valuated cheaply with a Price/Forward Earnings ratio of 7.90.
Based on the Price/Forward Earnings ratio, ARW is valued cheaply inside the industry as 96.80% of the companies are valued more expensively.
ARW is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.43, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.51 | ||
| Fwd PE | 7.9 |
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 90.40% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, ARW is valued cheaply inside the industry as 95.20% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.32 | ||
| EV/EBITDA | 8.59 |
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 24.41% in the coming years.
PEG (NY)6.55
PEG (5Y)1.94
EPS Next 2Y22.06%
EPS Next 3Y24.41%
5. Dividend
5.1 Amount
ARW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
120.64
-0.29 (-0.24%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners107.23%
Inst Owner Change-0.58%
Ins Owners0.73%
Ins Owner Change5.26%
Market Cap6.26B
Analysts50
Price Target120.63 (-0.01%)
Short Float %7.59%
Short Ratio5.63
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)0.03%
PT rev (3m)-7.74%
EPS NQ rev (1m)1.26%
EPS NQ rev (3m)-2.74%
EPS NY rev (1m)1.56%
EPS NY rev (3m)-0.35%
Revenue NQ rev (1m)4.39%
Revenue NQ rev (3m)3.37%
Revenue NY rev (1m)3.78%
Revenue NY rev (3m)1.6%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.51 | ||
| Fwd PE | 7.9 | ||
| P/S | 0.22 | ||
| P/FCF | 6.32 | ||
| P/OCF | 5.8 | ||
| P/B | 1.06 | ||
| P/tB | 1.67 | ||
| EV/EBITDA | 8.59 |
EPS(TTM)9.64
EY7.99%
EPS(NY)15.27
Fwd EY12.66%
FCF(TTM)19.1
FCFY15.83%
OCF(TTM)20.8
OCFY17.24%
SpS536.21
BVpS114.23
TBVpS72.39
PEG (NY)6.55
PEG (5Y)1.94
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 | 2.37 |
F-Score5
WACC8.99%
ROIC/WACC0.84
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 2Y22.06%
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 Year3.45%
Revenue Next 2Y5.07%
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 Year12.09%
EBIT Next 3Y18.41%
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%