Arrow Financial (AROW) AI Stock Analysis

• Market Cap: $482.54M
• Dividend Yield: 3.86%
• Average Volume (3M): 42.36K
• Price to Earnings (P/E): 16.0
• Beta (1Y): 0.83
• Revenue Growth: 8.36%
• EPS Growth: -2.24%
• Country: US
• Employees: 580
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.65
• Shares Outstanding: 16,469,027
• 10 Day Avg. Volume: 51,528
• 30 Day Avg. Volume: 42,363
• PEG Ratio: 28.63
• Price to Book (P/B): 1.20
• Price to Sales (P/S): 2.15
• P/FCF Ratio: 16.65
• Enterprise Value/Market Cap: 0.90
• Enterprise Value/Revenue: 1.89
• Enterprise Value/Gross Profit: 3.09
• Enterprise Value/Ebitda: 10.18
• 1Y Price Target: $31.00
• Price Target Upside: 5.51% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 77 Outperform
• Price Target: $33.00 ▲(12.32% Upside)

Arrow Financial's overall stock score of 77 reflects its strong financial performance, positive technical indicators, and favorable corporate events. The company's robust balance sheet and consistent revenue growth are significant strengths, while the reasonable valuation and attractive dividend yield provide additional support. The absence of earnings call data does not impact the score significantly due to the positive corporate events.

Arrow Financial Business Overview & Revenue Model

Company Description

Arrow Financial Corporation (AROW) is a diversified financial services holding company based in the United States. The company primarily operates through its subsidiaries which include a commercial bank, a trust company, and an insurance agency. Arrow Financial focuses on providing a range of financial solutions, including personal and commercial banking services, wealth management, and insurance products to individuals and businesses in its regional markets.

How the Company Makes Money

Arrow Financial generates revenue through multiple streams. The primary source of income is interest income derived from loans and advances made through its banking operations, including commercial loans, residential mortgages, and personal loans. Additionally, the company earns non-interest income from fees associated with its wealth management services, such as investment advisory fees and trust services. The insurance agency contributes further revenue through premiums collected from various insurance products. Strategic partnerships with local businesses and institutions also enhance its market presence and drive customer acquisition, thereby contributing to its overall earnings.

Arrow Financial Financial Statement Overview

Summary

Arrow Financial exhibits a solid financial foundation with consistent revenue growth and prudent debt management. While the company maintains strong profitability margins, minor declines in some ratios and fluctuations in cash flow growth present areas for attention.

Income Statement

Arrow Financial shows a generally positive income statement performance. The company has maintained a consistent gross profit margin, with slight improvements in total revenue over recent years. The net profit margin is healthy, although it slightly decreased in the TTM period. Revenue growth is evident with a steady upward trajectory, indicating robust market presence and operational efficiency. However, a notable decline in EBIT margin from its 2022 levels suggests increased operational costs or other pressures impacting profitability.

Balance Sheet

The balance sheet of Arrow Financial reflects a stable financial position. The debt-to-equity ratio is low, indicating prudent leverage management and a solid equity base. The equity ratio remains strong, showing a healthy proportion of equity financing relative to total assets. Return on equity is positive, though it has seen a slight decline in the TTM period, suggesting room for improvement in generating returns on shareholder investments.

Cash Flow

Arrow Financial's cash flow analysis reveals a stable operating cash flow with positive free cash flow, demonstrating effective cash management. However, the free cash flow growth rate shows fluctuations, indicating potential volatility in cash generation. The operating cash flow to net income ratio remains robust, underscoring efficient conversion of earnings into cash. Despite these strengths, the lower free cash flow to net income ratio in the latest period highlights potential challenges in maintaining cash reserves.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	230.09M	223.07M	191.68M	160.55M	147.92M	144.55M
Gross Profit	140.42M	134.63M	130.57M	144.44M	142.45M	122.54M
EBITDA	42.71M	42.72M	44.24M	70.46M	72.23M	58.73M
Net Income	30.56M	29.71M	30.07M	48.80M	49.86M	40.83M
Balance Sheet
Total Assets	4.41B	4.31B	4.17B	3.97B	4.03B	3.69B
Cash, Cash Equivalents and Short-Term Investments	40.98M	617.66M	640.30M	638.15M	1.02B	746.28M
Total Debt	33.57M	33.60M	71.57M	106.92M	70.17M	87.70M
Total Liabilities	4.01B	3.91B	3.79B	3.62B	3.66B	3.35B
Stockholders Equity	408.51M	400.90M	379.77M	353.54M	371.19M	334.39M
Cash Flow
Free Cash Flow	29.23M	28.87M	13.50M	45.46M	61.07M	37.18M
Operating Cash Flow	35.39M	34.47M	20.58M	59.71M	68.21M	42.31M
Investing Cash Flow	-45.77M	-88.95M	-82.65M	-393.06M	-274.60M	-187.32M
Financing Cash Flow	78.64M	66.49M	139.95M	-59.69M	283.10M	455.77M

Arrow Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 29.38
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AROW, the sentiment is Positive. The current price of 29.38 is above the 20-day moving average (MA) of 28.89, above the 50-day MA of 27.60, and above the 200-day MA of 26.77, indicating a bullish trend. The MACD of 0.65 indicates Positive momentum. The RSI at 59.99 is Neutral, neither overbought nor oversold. The STOCH value of 67.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AROW.

Arrow Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AROW	77 Outperform	$482.54M	15.97	7.72%	3.86%	8.36%	-2.24%
ALRS	76 Outperform	$573.45M	13.43	9.19%	3.58%	40.69%	373.32%
SHBI	75 Outperform	$566.42M	10.52	9.88%	2.82%	2.66%	128.06%
BCAL	74 Outperform	$556.05M	19.76	7.44%	―	88.14%	0.65%
ACNB	73 Outperform	$470.10M	16.65	7.36%	2.94%	32.18%	-26.13%
HONE	69 Neutral	$559.77M	20.02	4.56%	2.68%	5.00%	72.45%
Sector *	68 Neutral	$17.80B	11.94	9.89%	3.74%	9.69%	1.17%

Arrow Financial Corporate Events

Arrow Financial Reports Strong Q2 2025 Performance

Arrow Financial Corporation reported a strong financial performance for the second quarter of 2025, with a net income of $10.8 million and an EPS of $0.65, showing significant growth from the previous quarter. The company declared a quarterly cash dividend of $0.29 per share and authorized an additional $5 million for stock repurchases, reflecting its solid financial position and commitment to returning value to shareholders.

Arrow Financial’s David Kaiser Retires, Begins Consultancy

Arrow Financial Corporation announced that David D. Kaiser, the former Senior Executive Vice President and Chief Credit Officer, retired from all his positions with the company and its subsidiaries as of June 30, 2025. Following his retirement, Kaiser entered into a six-month Professional Services Agreement with Arrow Financial starting July 1, 2025, where he will provide services as directed by the CEO, with compensation of $2,500 per month plus expenses, and the agreement can be terminated by either party with 30 days’ notice.

Arrow Financial Hosts Virtual Investor Meetings June 2025

Arrow Financial Corporation is set to engage in virtual investor meetings on June 17 and 18, 2025, where they will present a Mid-2Q Update to current and potential investors. The company has shown strong net interest margin expansion through May 2025, with further growth expected, although at a moderated pace without additional rate cuts. The company’s disciplined pricing strategy has positively impacted core deposit rates, and they anticipate low single-digit loan growth for the fiscal year 2025. Additionally, Arrow Financial has been active in stock repurchases and maintains a strategic focus on mergers and acquisitions in branches, banks, wealth management, and insurance sectors.