Arrow Financial (AROW) AI Stock Analysis

• Market Cap: $518.18M
• Dividend Yield: 3.59%
• Average Volume (3M): 64.83K
• Price to Earnings (P/E): 15.3
• Beta (1Y): 0.80
• Revenue Growth: 6.86%
• EPS Growth: 6.11%
• Country: US
• Employees: 580
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.77
• Shares Outstanding: 16,442,453
• 10 Day Avg. Volume: 87,992
• 30 Day Avg. Volume: 64,831
• 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: 0.87
• Enterprise Value/Revenue: 1.93
• Enterprise Value/Gross Profit: 3.08
• Enterprise Value/Ebitda: 9.16
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 2.55
• Revenue Forecast (FY): $162.00M

• Rating: 78 Outperform
• Price Target: $36.00 ▲(18.07% Upside)

Arrow Financial's strong financial performance and positive corporate events are the most significant factors driving the score. The technical analysis supports a bullish outlook, while the valuation is fair with an attractive dividend yield. The absence of specific earnings call data does not detract from the overall positive assessment.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a stable demand for Arrow Financial's services, supporting long-term business sustainability.

Cash Generation

Strong cash generation enhances financial flexibility, allowing Arrow Financial to invest in growth opportunities and weather economic downturns.

Leadership Change

The addition of a tech-savvy director could drive innovation and digital transformation, strengthening Arrow Financial's competitive position.

Negative Factors

Profit Margin Pressure

Decreasing gross profit margins suggest rising costs or pricing pressures, which could impact long-term profitability if not managed effectively.

Operational Costs

Significant operational costs from mergers and system upgrades may strain short-term financials, requiring efficient cost management to maintain margins.

Shareholder Litigation

Ongoing legal issues, even if not financially material, can distract management and affect the company's reputation, impacting long-term strategic focus.

Arrow Financial Business Overview & Revenue Model

Company Description

Arrow Financial Corporation (AROW) is a diversified financial services company that operates primarily in the banking and insurance sectors. It offers a range of banking products including loans, savings accounts, and mortgages through its subsidiaries. Additionally, Arrow Financial provides various insurance products, including life, health, and property insurance, catering to both individual and business clients. The company is committed to delivering tailored financial solutions and fostering strong relationships with its customers.

How the Company Makes Money

Arrow Financial generates revenue through multiple streams, primarily from interest income on loans and mortgages, as well as fees associated with its banking services. The company earns significant income from its insurance operations through premiums collected from policyholders. Additionally, it may derive revenue from investment income generated by managing assets and investing in securities. Strategic partnerships with other financial institutions and service providers further enhance its offerings and contribute to its earnings, allowing for cross-selling opportunities and expanded market reach.

Arrow Financial Financial Statement Overview

Summary

Arrow Financial demonstrates a strong financial position with consistent revenue growth and efficient cost management. The balance sheet is robust with low leverage, although profitability metrics have shown slight declines. Cash flow generation remains solid, but there are areas for improvement in cash conversion efficiency. Overall, the company is well-positioned in the regional banking sector, with a stable outlook.

Income Statement

Arrow Financial has shown consistent revenue growth over the years, with a TTM revenue growth rate of 1.48%. The gross profit margin has remained strong at around 61%, indicating efficient cost management. However, the net profit margin has decreased from historical highs, currently at 13.28% TTM, reflecting some pressure on profitability. EBIT and EBITDA margins have also slightly declined, suggesting potential challenges in operational efficiency.

Balance Sheet

The company maintains a solid balance sheet with a low debt-to-equity ratio of 0.08 TTM, indicating prudent financial leverage. Return on equity is stable at 7.61% TTM, although it has decreased from previous years, suggesting a slight decline in profitability relative to equity. The equity ratio remains healthy, showcasing a strong capital structure.

Cash Flow

Arrow Financial's cash flow position is stable, with a positive free cash flow growth rate of 2.67% TTM. The operating cash flow to net income ratio is low, indicating potential challenges in converting income into cash. However, the free cash flow to net income ratio is robust at 82.61% TTM, reflecting effective cash generation relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	234.83M	223.07M	191.68M	160.55M	147.92M	144.55M
Gross Profit	146.82M	134.63M	130.57M	144.44M	142.45M	122.54M
EBITDA	49.33M	42.72M	44.24M	70.46M	72.23M	58.73M
Net Income	34.41M	29.71M	30.07M	48.80M	49.86M	40.83M
Balance Sheet
Total Assets	4.59B	4.31B	4.17B	3.97B	4.03B	3.69B
Cash, Cash Equivalents and Short-Term Investments	921.34M	617.66M	640.30M	638.15M	1.02B	746.28M
Total Debt	29.19M	33.60M	71.57M	106.92M	70.17M	87.70M
Total Liabilities	4.17B	3.91B	3.79B	3.62B	3.66B	3.35B
Stockholders Equity	417.69M	400.90M	379.77M	353.54M	371.19M	334.39M
Cash Flow
Free Cash Flow	35.47M	28.87M	13.50M	45.46M	61.07M	37.18M
Operating Cash Flow	41.00M	34.47M	20.58M	59.71M	68.21M	42.31M
Investing Cash Flow	-128.16M	-88.95M	-82.65M	-393.06M	-274.60M	-187.32M
Financing Cash Flow	144.51M	66.49M	139.95M	-59.69M	283.10M	455.77M

Arrow Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 30.49
• 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 30.49 is below the 20-day moving average (MA) of 31.41, above the 50-day MA of 29.59, and above the 200-day MA of 27.09, indicating a bullish trend. The MACD of 0.76 indicates Positive momentum. The RSI at 53.23 is Neutral, neither overbought nor oversold. The STOCH value of 52.97 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	78 Outperform	$518.18M	15.28	8.49%	3.59%	6.86%	6.11%
ACNB	78 Outperform	$524.54M	15.17	9.18%	2.73%	41.95%	-4.72%
BWB	74 Outperform	$500.11M	13.81	8.63%	―	13.96%	25.74%
NFBK	72 Outperform	$501.31M	12.16	5.56%	4.34%	6.08%	52.64%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
FFIC	60 Neutral	$582.34M	-14.36	-5.05%	5.16%	-11.91%	-235.73%
FFWM	48 Neutral	$511.40M	-3.15	-16.22%	―	-6.47%	-75.82%

Arrow Financial Corporate Events

Arrow Financial Appoints Darrin Jahnel as Director

On November 25, 2025, Arrow Financial Corporation appointed Darrin Jahnel as a director. Jahnel, with over 25 years of experience in technology, is the founder and CEO of Jahnel Group and has been involved in other ventures such as InfoLink and LTI. His appointment does not involve joining any board committees, and there are no related party transactions requiring disclosure.

Arrow Financial Announces Preliminary Settlement Approval

Arrow Financial Corporation, a company listed on Nasdaq under the symbol AROW, announced on November 5, 2025, the preliminary approval of a settlement regarding a Shareholder Derivative Complaint filed by Stephen Bull on December 12, 2023. The United States District Court Northern District of New York approved the settlement preliminarily on October 22, 2025, with a final approval hearing set for January 12, 2026. The settlement is not expected to have any material financial impact on Arrow’s operations or financial position.

Arrow Financial Reports Strong Q3 2025 Earnings

Arrow Financial Corporation reported a net income of $12.8 million for the third quarter of 2025, with earnings per share of $0.77, marking an increase from the previous quarter. The company declared a quarterly cash dividend of $0.29 per share, payable on November 24, 2025. The quarter saw record net interest income and improvements in net interest margin and return on average assets. The company completed a system conversion and operational merger of its banking subsidiaries in July 2025, incurring non-core unification costs of $600 thousand. With recent Federal Reserve interest rate cuts, Arrow is well-positioned for continued strong performance.