We assign a fundamental rating of 4 out of 10 to ARW. ARW was compared to 123 industry peers in the Electronic Equipment, Instruments & Components industry. ARW has only an average score on both its financial health and profitability. ARW has a correct valuation and a medium growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year ARW was profitable.
In the past year ARW had a positive cash flow from operations.
In the past 5 years ARW has always been profitable.
Of the past 5 years ARW 4 years had a positive operating cash flow.

1.2 Ratios

The Return On Assets of ARW (1.94%) is comparable to the rest of the industry.
ARW's Return On Equity of 7.43% is fine compared to the rest of the industry. ARW outperforms 65.04% of its industry peers.
ARW has a Return On Invested Capital of 6.43%. This is in the better half of the industry: ARW outperforms 65.85% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ARW is above the industry average of 8.81%.
The 3 year average ROIC (12.62%) for ARW is well above the current ROIC(6.43%). The reason for the recent decline needs to be investigated.

		Industry Rank	Sector Rank
ROA	1.94%
ROE	7.43%
ROIC	6.43%

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 of 1.62%. This is comparable to the rest of the industry: ARW outperforms 55.28% of its industry peers.
ARW's Profit Margin has declined in the last couple of years.
With a Operating Margin value of 2.79%, ARW perfoms like the industry average, outperforming 55.28% of the companies in the same 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 11.10%, ARW is not doing good in the industry: 78.05% of the companies in the same industry are doing better.
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	2.79%
PM (TTM)	1.62%
GM	11.1%

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%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

ARW has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, ARW has less shares outstanding
The number of shares outstanding for ARW has been reduced compared to 5 years ago.
The debt/assets ratio for ARW has been reduced compared to a year ago.

2.2 Solvency

An Altman-Z score of 2.23 indicates that ARW is not a great score, but indicates only limited risk for bankruptcy at the moment.
ARW's Altman-Z score of 2.23 is on the low side compared to the rest of the industry. ARW is outperformed by 63.41% of its industry peers.
ARW has a debt to FCF ratio of 33.32. This is a negative value and a sign of low solvency as ARW would need 33.32 years to pay back of all of its debts.
ARW's Debt to FCF ratio of 33.32 is in line compared to the rest of the industry. ARW outperforms 50.41% of its industry peers.
A Debt/Equity ratio of 0.49 indicates that ARW is not too dependend on debt financing.
ARW's Debt to Equity ratio of 0.49 is on the low side compared to the rest of the industry. ARW is outperformed by 67.48% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.49
Debt/FCF	33.32
Altman-Z	2.23

ROIC/WACC0.85

WACC7.58%

2.3 Liquidity

A Current Ratio of 1.46 indicates that ARW should not have too much problems paying its short term obligations.
ARW's Current ratio of 1.46 is on the low side compared to the rest of the industry. ARW is outperformed by 76.42% of its industry peers.
A Quick Ratio of 1.14 indicates that ARW should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.14, ARW is doing worse than 71.54% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	1.46
Quick Ratio	1.14

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

ARW shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -14.65%.
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 small growth in Revenue. In the last year, the Revenue has grown by 3.16%.
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)-14.65%

EPS 3Y-13.05%

EPS 5Y6.45%

EPS Q2Q%1.26%

Revenue 1Y (TTM)3.16%

Revenue growth 3Y-6.79%

Revenue growth 5Y-0.7%

Sales Q2Q%13.03%

3.2 Future

The Earnings Per Share is expected to grow by 11.01% on average over the next years. This is quite good.
The Revenue is expected to grow by 5.45% on average over the next years.

EPS Next Y0.61%

EPS Next 2Y7.91%

EPS Next 3Y10.88%

EPS Next 5Y11.01%

Revenue Next Year9.27%

Revenue Next 2Y6.75%

Revenue Next 3Y6.26%

Revenue Next 5Y5.45%

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.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 13.79, ARW is valued correctly.
Based on the Price/Earnings ratio, ARW is valued cheaply inside the industry as 87.80% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of ARW to the average of the S&P500 Index (28.30), we can say ARW is valued rather cheaply.
The Price/Forward Earnings ratio is 11.10, which indicates a very decent valuation of ARW.
Based on the Price/Forward Earnings ratio, ARW is valued cheaper than 91.06% of the companies in the same industry.
ARW is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.57, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	13.79
Fwd PE	11.1

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, ARW is valued cheaply inside the industry as 88.62% of the companies are valued more expensively.
The rest of the industry has a similar Price/Free Cash Flow ratio as ARW.

		Industry Rank	Sector Rank
P/FCF	72.65
EV/EBITDA	10.13

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.

PEG (NY)22.76

PEG (5Y)2.14

EPS Next 2Y7.91%

EPS Next 3Y10.88%

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5. Dividend

5.1 Amount

ARW does not give a dividend.

		Industry Rank	Sector Rank
Dividend Yield	0%

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ARROW ELECTRONICS INC / ARW FAQ

What is the fundamental rating for ARW stock?

ChartMill assigns a fundamental rating of 4 / 10 to ARW.

What is the valuation status for ARW stock?

ChartMill assigns a valuation rating of 5 / 10 to ARROW ELECTRONICS INC (ARW). This can be considered as Fairly Valued.

Can you provide the profitability details for ARROW ELECTRONICS INC?

ARROW ELECTRONICS INC (ARW) has a profitability rating of 5 / 10.

Can you provide the PE and PB ratios for ARW stock?

The Price/Earnings (PE) ratio for ARROW ELECTRONICS INC (ARW) is 13.79 and the Price/Book (PB) ratio is 1.07.