ARROW ELECTRONICS INC (ARW) Stock Fundamental Analysis
NYSE:ARW - New York Stock Exchange, Inc. - US0427351004 - Common Stock - Currency: USD
ARW gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 125 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 scores decently on growth, while it is valued quite cheap. This could make an interesting combination. These ratings would make ARW suitable 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
ARW has a Return On Assets (1.81%) which 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.
The Return On Invested Capital of ARW (7.54%) is better 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 9.16%.
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
With a Profit Margin value of 1.40%, ARW perfoms like the industry average, outperforming 56.00% of the companies in the same industry.
In the last couple of years the Profit Margin of ARW has declined.
The Operating Margin of ARW (3.07%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of ARW has remained more or less at the same level.
With a Gross Margin value of 11.54%, ARW is not doing good in the industry: 75.20% of the companies in the same industry are doing better.
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ARW is still creating some value.
The number of shares outstanding for ARW has been reduced compared to 1 year ago.
Compared to 5 years ago, ARW has less shares outstanding
Compared to 1 year ago, ARW has an improved debt to assets ratio.
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.
The Altman-Z score of ARW (2.40) is worse than 68.00% 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.
The Debt to FCF ratio of ARW (2.87) is better than 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 64.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 2.87 | ||
| Altman-Z | 2.4 |
ROIC/WACC0.83
WACC9.14%
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.
With a Current ratio value of 1.43, ARW is not doing good in the industry: 78.40% of the companies in the same industry are doing better.
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.
Looking at the Quick ratio, with a value of 1.05, ARW is doing worse than 77.60% of the companies in the same industry.
| 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%.
The Earnings Per Share has been growing slightly by 6.45% on average over the past years.
ARW shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -11.13%.
ARW shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.70% yearly.
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.
ARW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.95% yearly.
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.
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
ARW is valuated correctly with a Price/Earnings ratio of 13.71.
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.
The average S&P500 Price/Earnings ratio is at 27.30. ARW is valued slightly cheaper when compared to this.
ARW is valuated reasonably with a Price/Forward Earnings ratio of 8.70.
96.80% of the companies in the same industry are more expensive than ARW, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 21.76. ARW is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.71 | ||
| Fwd PE | 8.7 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARW is valued cheaply inside the industry as 91.20% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ARW is valued cheaply inside the industry as 94.40% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.92 | ||
| EV/EBITDA | 9.23 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
ARW's earnings are expected to grow with 24.41% in the coming years. This may justify a more expensive valuation.
PEG (NY)7.17
PEG (5Y)2.13
EPS Next 2Y21.77%
EPS Next 3Y24.41%
5. Dividend
5.1 Amount
ARW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
132.16
-1.08 (-0.81%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners107.32%
Inst Owner Change0%
Ins Owners0.61%
Ins Owner Change4.99%
Market Cap6.86B
Analysts50
Price Target118.86 (-10.06%)
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)0.88%
EPS NQ rev (3m)-0.68%
EPS NY rev (1m)0%
EPS NY rev (3m)1.56%
Revenue NQ rev (1m)0.64%
Revenue NQ rev (3m)7.14%
Revenue NY rev (1m)0%
Revenue NY rev (3m)5.56%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.71 | ||
| Fwd PE | 8.7 | ||
| P/S | 0.25 | ||
| P/FCF | 6.92 | ||
| P/OCF | 6.35 | ||
| P/B | 1.16 | ||
| P/tB | 1.83 | ||
| EV/EBITDA | 9.23 |
EPS(TTM)9.64
EY7.29%
EPS(NY)15.2
Fwd EY11.5%
FCF(TTM)19.1
FCFY14.45%
OCF(TTM)20.8
OCFY15.74%
SpS536.21
BVpS114.23
TBVpS72.39
PEG (NY)7.17
PEG (5Y)2.13
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
WACC9.14%
ROIC/WACC0.83
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%