ARROW ELECTRONICS INC (ARW) Stock Fundamental Analysis
NYSE:ARW - New York Stock Exchange, Inc. - US0427351004 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to ARW. ARW was compared to 125 industry peers in the Electronic Equipment, Instruments & Components industry. ARW has an average financial health and profitability rating. A decent growth rate in combination with a cheap valuation! Better keep an eye on ARW. This makes ARW very considerable 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.
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 (1.81%) is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 6.55%, ARW is in the better half of the industry, outperforming 64.80% 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 76.80% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ARW is above the industry average of 9.35%.
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.
| 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
The Profit Margin of ARW (1.40%) is comparable to the rest of the industry.
ARW's Profit Margin has declined in the last couple of years.
With a Operating Margin value of 3.07%, ARW perfoms like the industry average, outperforming 56.80% of the companies in the same industry.
ARW's Operating Margin has been stable in the last couple of years.
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.
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 | 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.
Compared to 1 year ago, ARW has less shares outstanding
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
ARW has an Altman-Z score of 2.38. 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 Altman-Z score of 2.38. This is in the lower half of the industry: ARW underperforms 67.20% 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 has a better Debt to FCF ratio (2.87) than 71.20% of its industry peers.
A Debt/Equity ratio of 0.42 indicates that ARW is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.42, ARW is doing worse than 64.80% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 2.87 | ||
| Altman-Z | 2.38 |
ROIC/WACC0.9
WACC8.35%
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's Current ratio of 1.43 is on the low side compared to the rest of the industry. ARW is outperformed by 78.40% 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 77.60% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.43 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
The earnings per share for ARW have decreased strongly by -35.30% in the last year.
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.
The Revenue for ARW has decreased by -11.13% in the past year. This is quite bad
The Revenue has been decreasing by -0.70% on average over the past years.
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
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 2Y22.06%
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
With a Price/Earnings ratio of 12.95, ARW is valued correctly.
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.
ARW's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.57.
Based on the Price/Forward Earnings ratio of 8.17, the valuation of ARW can be described as reasonable.
Based on the Price/Forward Earnings ratio, ARW is valued cheaper than 96.80% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.41, ARW is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.95 | ||
| Fwd PE | 8.17 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARW is valued cheaper than 88.80% of the companies in the same industry.
ARW's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ARW is cheaper than 94.40% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.54 | ||
| EV/EBITDA | 8.66 |
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.
ARW's earnings are expected to grow with 24.41% in the coming years. This may justify a more expensive valuation.
PEG (NY)6.77
PEG (5Y)2.01
EPS Next 2Y22.06%
EPS Next 3Y24.41%
5. Dividend
5.1 Amount
No dividends for ARW!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
124.83
+2.8 (+2.29%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners107.32%
Inst Owner Change-0.59%
Ins Owners0.61%
Ins Owner Change4.97%
Market Cap6.47B
Analysts50
Price Target117.84 (-5.6%)
Short Float %6.74%
Short Ratio5.14
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)-2.31%
PT rev (3m)-2.28%
EPS NQ rev (1m)-2.77%
EPS NQ rev (3m)-1.55%
EPS NY rev (1m)0%
EPS NY rev (3m)1.56%
Revenue NQ rev (1m)1.98%
Revenue NQ rev (3m)6.46%
Revenue NY rev (1m)1.72%
Revenue NY rev (3m)5.56%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.95 | ||
| Fwd PE | 8.17 | ||
| P/S | 0.23 | ||
| P/FCF | 6.54 | ||
| P/OCF | 6 | ||
| P/B | 1.09 | ||
| P/tB | 1.72 | ||
| EV/EBITDA | 8.66 |
EPS(TTM)9.64
EY7.72%
EPS(NY)15.27
Fwd EY12.23%
FCF(TTM)19.1
FCFY15.3%
OCF(TTM)20.8
OCFY16.66%
SpS536.21
BVpS114.23
TBVpS72.39
PEG (NY)6.77
PEG (5Y)2.01
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 | 2.38 |
F-Score5
WACC8.35%
ROIC/WACC0.9
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 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%