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Arrow Electronics, Inc. (ARW)
:ARW
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Arrow Electronics (ARW) AI Stock Analysis

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ARW

Arrow Electronics

(NYSE:ARW)

Rating:65Neutral
Price Target:
$123.00
▲(7.27%Upside)
Arrow Electronics is facing a mixed outlook. The most significant factor is the solid performance and positive guidance from the earnings call, suggesting potential growth and recovery. However, technical analysis indicates bearish momentum, with the stock in oversold conditions, which could signal further downside risks. Financial performance shows stability with some profitability pressures, while valuation suggests possible undervaluation but offers no dividend yield. Together, these factors lead to a moderate overall score.
Positive Factors
Cash Flow
Despite a 4% increase in inventory, Arrow's cash flow grew to $326M due to a favorable move in accounts payable.
Earnings
In the ECS segment ARW delivered year-over-year billings growth.
Supply Chain Management
ARW's supply chain management and integration services were accretive to operating results.
Negative Factors
Revenue Guidance
Revenue and earnings guidance for the upcoming quarter are significantly below expectations, impacting the stock's performance.
Stock Rating
The timing of recovery remains unclear, leading to a downgrade in the stock rating to Underperform.
Tariffs
Significant uncertainty remains with the potential impact of tariffs on end demand.

Arrow Electronics (ARW) vs. SPDR S&P 500 ETF (SPY)

Arrow Electronics Business Overview & Revenue Model

Company DescriptionArrow 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 operates in two segments, Global Components and Global Enterprise Computing Solutions. The Global Components segment markets and distributes semiconductor products and related services; passive, electro-mechanical, and interconnect products, including capacitors, resistors, potentiometers, power supplies, relays, switches, and connectors; and computing and memory products, as well as other products and services. The Global Enterprise Computing Solutions segment offers computing solutions, such as datacenter, cloud, security, and analytics solutions. This segment provides access to various services, including engineering and integration support, warehousing and logistics, marketing resources, and authorized hardware and software training. The company serves original equipment manufacturers, value-added resellers, managed service providers, contract manufacturers, and other commercial customers. Arrow Electronics, Inc. was founded in 1935 and is based in Centennial, Colorado.
How the Company Makes MoneyArrow Electronics makes money through the sale of electronic components and enterprise computing solutions. Its Global Components segment generates revenue by distributing electronic components to industrial and commercial customers, providing design, engineering, and supply chain services. The Global Enterprise Computing Solutions segment earns revenue by delivering enterprise computing products, services, and solutions to value-added resellers, managed service providers, and system integrators. Key revenue streams include the distribution of semiconductors and computing products, as well as the provision of supply chain management and logistics services. The company also forms strategic partnerships with leading technology manufacturers and suppliers, which enhances its product offerings and contributes significantly to its earnings.

Arrow Electronics Earnings Call Summary

Earnings Call Date:Jul 31, 2025
(Q2-2025)
|
% Change Since: -11.65%|
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
Arrow Electronics demonstrated strong performance exceeding its guidance in the second quarter, with significant growth in both its Global Components and ECS segments. The company shows promising indicators of market recovery, particularly in Asia, and strong backlog growth. However, it faces challenges related to margin pressures, uncertainties around tariffs, and ongoing inventory adjustments in the mass market. The sentiment is cautiously optimistic, anticipating further recovery.
Q2-2025 Updates
Positive Updates
Exceeding Guidance Expectations
Arrow Electronics delivered sales and earnings per share that exceeded the high end of their guidance ranges for the second quarter of 2025.
Global Components Growth
Year-over-year growth in global components was observed for the first time since Q4 of 2022, with particular strength in Asia and improvements in industrial and transportation segments.
Enterprise Computing Solutions Performance
The ECS segment delivered double-digit year-over-year growth in billings, gross profit, and operating income, with strong performance in both operating regions.
Backlog and Book-to-Bill Ratios
The company's backlog improved for the second consecutive quarter, and book-to-bill ratios are above parity in all three regions, indicating a potential market recovery.
Negative Updates
Margin Pressures
Consolidated non-GAAP gross margin decreased by approximately 110 basis points year-over-year, mainly due to regional and customer mix impacting the global components segment.
Tariff and Trade Policy Uncertainties
Modest order acceleration was observed in Asia due to tariff expectations, but there is uncertainty around future trade policy and its impacts.
Inventory and Demand Challenges
The mass market customer base is still in the later stages of destocking, affecting demand visibility and contributing to challenges in managing inventory levels.
Company Guidance
During Arrow Electronics' second quarter 2025 earnings call, the company provided guidance reflecting a positive outlook for the third quarter despite ongoing geopolitical and market uncertainties. Arrow Electronics reported consolidated sales of $7.6 billion for Q2, exceeding their guidance range, with non-GAAP diluted earnings per share (EPS) also above expectations at $2.43. Global Components sales reached $5.3 billion, showing 11% growth compared to the prior quarter, while Enterprise Computing Solutions (ECS) sales were $2.3 billion, up 23% year-over-year. For Q3, Arrow expects sales to be in the range of $7.3 billion to $7.9 billion, with Global Components sales anticipated to be between $5.3 billion and $5.7 billion, and ECS sales projected between $2 billion and $2.2 billion. Non-GAAP diluted EPS for Q3 is expected to range from $2.16 to $2.36. The company highlighted mid-single-digit sales growth and operating margin stability as key trends, with the backlog improving for a second consecutive quarter, indicating a modest market recovery ahead.

Arrow Electronics Financial Statement Overview

Summary
Arrow Electronics shows moderate profitability with stable margins and robust cash flow generation, despite revenue contraction. The balance sheet reflects financial stability with conservative leverage and manageable equity returns.
Income Statement
65
Positive
Arrow Electronics shows a mixed performance in TTM. The gross profit margin is 11.24% and net profit margin is 1.40%, indicating stable but not exceptional profitability. Revenue has decreased from the previous year, showcasing a revenue contraction trend. EBIT and EBITDA margins stand at 2.81% and 3.05%, respectively, reflecting moderate operational efficiency. The trajectory indicates caution in revenue growth despite steady margins.
Balance Sheet
73
Positive
The company maintains a stable balance sheet with a debt-to-equity ratio of 0.48, indicating a conservative leverage position. Return on equity (ROE) is at 6.55%, showing moderate profitability for shareholders. The equity ratio of 27.69% suggests a reasonable proportion of assets financed by equity. Overall, Arrow Electronics demonstrates financial stability with manageable leverage, though growth in equity returns remains moderate.
Cash Flow
78
Positive
Arrow Electronics exhibits robust cash flow management. The operating cash flow to net income ratio is 2.78, highlighting strong cash conversion capabilities. Free cash flow has decreased slightly but remains positive at $1.02 billion, indicating solid free cash flow generation despite a challenging revenue environment. This positions the company well for future financial commitments.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue28.50B27.92B33.11B37.12B34.48B28.67B
Gross Profit3.17B3.29B4.15B4.84B4.20B3.19B
EBITDA763.95M984.44M1.67B2.26B1.78B1.10B
Net Income467.24M392.07M903.50M1.43B1.11B584.44M
Balance Sheet
Total Assets24.25B21.76B21.73B21.76B19.54B17.05B
Cash, Cash Equivalents and Short-Term Investments221.97M188.81M218.05M176.91M222.19M373.62M
Total Debt2.82B3.12B3.81B3.77B2.63B2.26B
Total Liabilities17.84B15.93B15.85B16.15B14.19B11.90B
Stockholders Equity6.33B5.76B5.81B5.55B5.28B5.09B
Cash Flow
Free Cash Flow511.74M1.04B622.16M-111.91M335.93M1.24B
Operating Cash Flow552.80M1.13B705.45M-33.08M418.98M1.36B
Investing Cash Flow32.00M-94.44M-72.32M-57.71M-60.12M-138.79M
Financing Cash Flow-737.87M-956.83M-666.22M109.78M-463.30M-1.23B

Arrow Electronics Technical Analysis

Technical Analysis Sentiment
Negative
Last Price114.66
Price Trends
50DMA
125.64
Negative
100DMA
116.75
Negative
200DMA
117.12
Negative
Market Momentum
MACD
-1.29
Positive
RSI
23.96
Positive
STOCH
21.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARW, the sentiment is Negative. The current price of 114.66 is below the 20-day moving average (MA) of 128.98, below the 50-day MA of 125.64, and below the 200-day MA of 117.12, indicating a bearish trend. The MACD of -1.29 indicates Positive momentum. The RSI at 23.96 is Positive, neither overbought nor oversold. The STOCH value of 21.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$11.62B16.468.83%1.19%6.60%19.93%
70
Outperform
$4.44B14.846.42%2.54%-10.52%-42.40%
69
Neutral
$1.56B18.739.78%0.81%4.94%-1.79%
69
Neutral
$853.66M13.627.32%-14.07%-9.65%
69
Neutral
$3.79B28.308.67%-7.61%-50.01%
65
Neutral
$5.91B12.967.74%-3.95%-16.72%
62
Neutral
$34.53B6.79-11.66%2.11%6.09%-7.36%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ARW
Arrow Electronics
114.66
-10.22
-8.18%
AVT
Avnet
51.87
3.26
6.71%
NSIT
Insight Enterprises
120.40
-59.60
-33.11%
CNXN
PC Connection
60.96
-8.69
-12.48%
SCSC
ScanSource
37.78
-7.97
-17.42%
SNX
TD SYNNEX Corporation
140.85
32.27
29.72%

Arrow Electronics Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Arrow Electronics Extends Credit Facility to $2 Billion
Neutral
Jun 27, 2025

On June 27, 2025, Arrow Electronics, Inc. and its subsidiaries entered into a Fifth Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A., extending their existing credit facility to $2 billion. This agreement extends the maturity date to June 27, 2030, introduces a step-up provision for leverage ratios during material acquisitions, and modifies various covenants and financial definitions, impacting the company’s operational flexibility and financial strategies.

The most recent analyst rating on (ARW) stock is a Buy with a $140.00 price target. To see the full list of analyst forecasts on Arrow Electronics stock, see the ARW Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Arrow Electronics Amends By-laws and Elects Directors
Neutral
May 8, 2025

On May 6, 2025, Arrow Electronics‘ Board of Directors approved an amendment and restatement of the company’s By-laws, introducing changes such as enhanced advance notice requirements for shareholder proposals, powers for meeting chairs, and proxy card color specifications. Additionally, at the 2025 Annual Meeting of Shareholders, ten directors were elected, Ernst & Young LLP’s appointment as the independent auditor was ratified, executive compensation was approved, and a proposal to replace supermajority voting provisions with simple majority standards was passed.

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.Date of analysis: Aug 02, 2025