Arrow Electronics (ARW)
NYSE:ARW
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Arrow Electronics
(NYSE:ARW)
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Rating:60Neutral
Price Target:
$147.00
▼(-7.07% Downside)
Action:ReiteratedDate:02/07/26
The score is driven primarily by mixed financial performance—improving revenue trend and a reasonable balance sheet are outweighed by sharply weaker cash flow and thinner margins. Technicals are supportive but appear overextended, while valuation is relatively reasonable. Earnings call commentary adds a positive tilt via strong Q4/Q1 momentum and ECS strength, tempered by working-capital-driven cash conversion risk and limited near-term visibility.
Positive Factors
ECS outperformance and secular tailwinds
Arrow’s ECS segment benefits from durable secular demand (hybrid cloud, AI, cybersecurity, data protection). Record profitability and a 75% YoY backlog rise indicate multi-quarter revenue visibility and higher-value project pipelines that can sustain above-market growth and improve long-term earnings quality.
Negative Factors
Sharply weakened operating cash flow
Cash generation has deteriorated materially relative to scale, increasing liquidity and execution risk. Persistent low operating cash flow constrains capital allocation, raises dependence on working capital financing and may limit the company’s ability to invest in higher‑margin services or absorb cyclical shocks.
Read all positive and negative factors
Positive Factors
Negative Factors
ECS outperformance and secular tailwinds
Arrow’s ECS segment benefits from durable secular demand (hybrid cloud, AI, cybersecurity, data protection). Record profitability and a 75% YoY backlog rise indicate multi-quarter revenue visibility and higher-value project pipelines that can sustain above-market growth and improve long-term earnings quality.
Read all positive factors
Arrow Electronics (ARW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.08B
Dividend YieldN/A
Average Volume (3M)478.53K
Price to Earnings (P/E)10.0
Beta (1Y)1.04
Revenue Growth3.16%
EPS Growth1.09%
CountryUS
Employees21,520
SectorTechnology
Sector Strength88
IndustryTechnology Distributors
Share Statistics
EPS (TTM)4.39
Shares Outstanding51,084,070
10 Day Avg. Volume537,189
30 Day Avg. Volume478,529
Financial Highlights & Ratios
PEG Ratio0.20
Price to Book (P/B)0.87
Price to Sales (P/S)0.18
P/FCF Ratio-153.41
Enterprise Value/Market Cap1.34
Enterprise Value/Revenue0.35
Enterprise Value/Gross Profit3.16
Enterprise Value/Ebitda11.20
Forecast
1Y Price Target
$108.00Price Target Upside-31.73% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering3
EPS Forecast (FY)12.25
Revenue Forecast (FY)$31.88B
Arrow Electronics Business Overview & Revenue Model
Company Description
Arrow Electronics, Inc. provides products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company o...
How the Company Makes Money
Arrow primarily makes money by selling products it sources from technology manufacturers to OEMs, contract manufacturers, and other business customers, earning a gross margin on distribution at scale. A major revenue stream is its Global Component...
Arrow Electronics Key Performance Indicators (KPIs)
Arrow Electronics Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call communicated materially positive operational and financial momentum: strong Q4 results (20% revenue growth and 48% EPS growth), record ECS profitability, sustained backlog increases, and deliberate progress shifting mix toward higher‑margin, value‑added services. These positives are tempered by margin pressure from regional/customer mix, a weak full‑year cash conversion performance, elevated working capital and inventory build, and lingering visibility and macro/geopolitical uncertainty. Management provided constructive Q1 guidance and reiterated a disciplined capital allocation approach, but emphasized the recovery remains gradual and variable by region and end market.Positive Updates
Strong Q4 Revenue and EPS Beat
Fourth quarter sales of $8.7 billion, up 20% year-over-year (16% organic cc), exceeded guidance; fourth quarter non-GAAP diluted EPS rose 48% year-over-year to $4.39 driven by favorable sales mix, higher value-added services mix and lower interest expense.
Negative Updates
Gross Margin Pressure from Mix Dynamics
Consolidated fourth quarter non‑GAAP gross margin was 11.5%, down 20 basis points year‑over‑year, with headwinds attributed to regional and customer mix within global components despite improving demand.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Q4 Revenue and EPS Beat
Fourth quarter sales of $8.7 billion, up 20% year-over-year (16% organic cc), exceeded guidance; fourth quarter non-GAAP diluted EPS rose 48% year-over-year to $4.39 driven by favorable sales mix, higher value-added services mix and lower interest expense.
Read all positive updates
Company Guidance
For Q1 2026 Arrow guided consolidated sales of $7.95 billion to $8.55 billion (midpoint $8.25B, +21% year‑over‑year at the midpoint), with global components sales of $5.75B to $6.15B (midpoint $5.95B, ~1% sequential growth at the midpoint) and ECS sales of $2.20B to $2.40B (midpoint $2.30B, ~13% year‑over‑year at the midpoint); they expect non‑GAAP diluted EPS of $2.70 to $2.90 (midpoint $2.80), an effective tax rate of 23%–25%, and interest expense of about $60 million, note that Q1 includes four additional shipping days (four fewer in Q4) that primarily affect ECS, and foreign currency impacts are detailed in the earnings release.Arrow Electronics Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
66
Positive
Cash Flow
34
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 30.85B | 27.92B | 33.11B | 37.12B | 34.48B |
| Gross Profit | 3.33B | 3.29B | 4.15B | 4.84B | 4.20B |
| EBITDA | 1.07B | 1.12B | 1.67B | 2.26B | 1.76B |
| Net Income | 571.27M | 392.07M | 903.50M | 1.43B | 1.11B |
Balance Sheet | |||||
| Total Assets | 29.08B | 21.76B | 21.73B | 21.76B | 19.54B |
| Cash, Cash Equivalents and Short-Term Investments | 306.47M | 188.81M | 218.05M | 176.91M | 222.19M |
| Total Debt | 3.09B | 3.39B | 3.81B | 3.77B | 2.63B |
| Total Liabilities | 22.42B | 15.93B | 15.85B | 16.15B | 14.19B |
| Stockholders Equity | 6.58B | 5.76B | 5.81B | 5.55B | 5.28B |
Cash Flow | |||||
| Free Cash Flow | -37.20M | 1.04B | 622.16M | -111.91M | 335.93M |
| Operating Cash Flow | 64.05M | 1.13B | 705.45M | -33.08M | 418.98M |
| Investing Cash Flow | 23.60M | -94.44M | -72.32M | -57.71M | -60.12M |
| Financing Cash Flow | -206.14M | -956.83M | -666.22M | 109.78M | -463.30M |
Arrow Electronics Technical Analysis
Positive
158.19
Price Trends
146.46
Positive
129.53
Positive
126.25
Positive
Market Momentum
3.09
Negative
68.57
Neutral
97.16
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARW, the sentiment is Positive. The current price of 158.19 is above the 20-day moving average (MA) of 144.53, above the 50-day MA of 146.46, and above the 200-day MA of 126.25, indicating a bullish trend. The MACD of 3.09 indicates Negative momentum. The RSI at 68.57 is Neutral, neither overbought nor oversold. The STOCH value of 97.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ARW.
Arrow Electronics Risk Analysis
Arrow Electronics disclosed 25 risk factors in its most recent earnings report. Arrow Electronics reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Arrow Electronics Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $16.05B | 9.59 | 11.60% | 1.15% | 6.95% | 19.19% | |
74 Outperform | $1.57B | 17.40 | 9.37% | 1.02% | 3.19% | -4.91% | |
71 Outperform | $5.49B | 16.25 | 4.22% | 2.77% | -2.30% | -29.75% | |
67 Neutral | $818.19M | 12.95 | 8.14% | ― | -4.88% | 2.57% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $8.08B | 9.99 | 9.05% | ― | 3.16% | 1.09% | |
59 Neutral | $2.13B | 16.31 | 9.79% | ― | -6.69% | -51.74% |
* Technology Sector Average
ARW
Arrow Electronics
158.19
58.19
58.19%
AVT
Avnet
67.03
21.96
48.72%
NSIT
Insight Enterprises
68.79
-67.17
-49.40%
CNXN
PC Connection
62.42
2.50
4.18%
SCSC
ScanSource
38.09
6.98
22.44%
SNX
TD SYNNEX Corporation
199.69
97.57
95.54%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.