Arrow Electronics (ARW) AI Stock Analysis

• Market Cap: $6.40B
• Dividend Yield: N/A
• Average Volume (3M): 475.72K
• Price to Earnings (P/E): 14.7
• Beta (1Y): 1.01
• Revenue Growth: -3.95%
• EPS Growth: -16.72%
• Country: US
• Employees: 21,520
• Sector: Technology
• Sector Strength: 83
• Industry: Technology Distributors
• EPS (TTM): 2.43
• Shares Outstanding: 51,501,705
• 10 Day Avg. Volume: 416,549
• 30 Day Avg. Volume: 475,723
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.46
• Enterprise Value/Revenue: 0.33
• Enterprise Value/Gross Profit: 2.94
• Enterprise Value/Ebitda: 10.56
• 1Y Price Target: $123.00
• Price Target Upside: -0.98% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 70 Outperform
• Price Target: $136.00 ▲(9.48% Upside)

Arrow Electronics' overall stock score is driven by a positive earnings call that highlights strong sales growth and market recovery. However, financial performance is pressured by declining margins and free cash flow, and technical indicators show mixed momentum. The valuation is reasonable, but the lack of a dividend yield may deter some investors.

Positive Factors

Earnings Growth

In the ECS segment ARW delivered year-over-year billings growth.

Operational Efficiency

ARW's supply chain management and integration services were accretive to operating results.

Negative Factors

Market Challenges

The company's components segment is facing weak margins due to challenges in the European market and certain end markets.

Stock Performance

Revenue and earnings guidance for the upcoming quarter are significantly below expectations, impacting the stock's performance.

Tariff Impact

Significant uncertainty remains with the potential impact of tariffs on end demand.

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 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 Money

Arrow Electronics generates revenue through multiple key channels. The primary source of income is the distribution of electronic components, where the company earns margins on the products it purchases from manufacturers and sells to customers. Additionally, Arrow provides value-added services such as logistics, supply chain management, and technical support, which further enhance its revenue. The Global Enterprise Computing Solutions segment contributes to earnings by offering IT solutions and services, including cloud computing and data center solutions, often through partnerships with leading technology providers. Significant partnerships with major manufacturers like Intel, Texas Instruments, and HP also bolster Arrow's product offerings, ensuring a steady stream of income from both product sales and service contracts.

Arrow Electronics Financial Statement Overview

Summary

Arrow Electronics demonstrates a stable yet pressured financial position with reasonable profitability and manageable leverage. However, declining profitability margins and free cash flow, along with moderate revenue growth, highlight challenges in sustaining growth and operational efficiency in a competitive technology distribution industry.

Income Statement

Arrow Electronics has shown a mixed performance in the TTM with a gross profit margin of 11.1% and a net profit margin of 1.6%. The revenue growth rate from the previous year is 2.1%, indicating slow growth. The EBIT margin stands at 2.5%, and the EBITDA margin is 2.7%, reflecting moderate operational efficiency. However, the decline in margins over the years suggests pressure on profitability.

Balance Sheet

The debt-to-equity ratio is 0.45, reflecting a manageable level of leverage. ROE is calculated at 7.4%, which is reasonable but not exceptional. The equity ratio is 26.1%, indicating a moderate level of financial stability. However, decreasing equity over the years and increasing liabilities pose potential risks.

Cash Flow

Free cash flow has grown by -50.7% compared to the last annual report, indicating a considerable decline. The operating cash flow to net income ratio is 1.18, suggesting that operating cash flows are sufficient to cover net income. However, a decrease in free cash flow poses a concern for future cash availability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	28.50B	27.92B	33.11B	37.12B	34.48B	28.67B
Gross Profit	3.17B	3.29B	4.15B	4.84B	4.20B	3.19B
EBITDA	883.79M	984.44M	1.67B	2.26B	1.78B	1.10B
Net Income	467.24M	392.07M	903.50M	1.43B	1.11B	584.44M
Balance Sheet
Total Assets	24.25B	21.76B	21.73B	21.76B	19.54B	17.05B
Cash, Cash Equivalents and Short-Term Investments	221.97M	188.81M	218.05M	176.91M	222.19M	373.62M
Total Debt	2.82B	3.12B	3.81B	3.77B	2.63B	2.26B
Total Liabilities	17.84B	15.93B	15.85B	16.15B	14.19B	11.90B
Stockholders Equity	6.33B	5.76B	5.81B	5.55B	5.28B	5.09B
Cash Flow
Free Cash Flow	468.14M	1.04B	622.16M	-111.91M	335.93M	1.24B
Operating Cash Flow	552.80M	1.13B	705.45M	-33.08M	418.98M	1.36B
Investing Cash Flow	32.00M	-94.44M	-72.32M	-57.71M	-60.12M	-138.79M
Financing Cash Flow	-737.87M	-956.83M	-666.22M	109.78M	-463.30M	-1.23B

Arrow Electronics Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 124.22
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 124.22 is above the 20-day moving average (MA) of 122.73, below the 50-day MA of 126.19, and above the 200-day MA of 116.33, indicating a neutral trend. The MACD of -0.42 indicates Negative momentum. The RSI at 50.00 is Neutral, neither overbought nor oversold. The STOCH value of 64.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ARW.

Arrow Electronics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNX	79 Outperform	$12.06B	17.09	8.83%	1.15%	6.60%	19.93%
CNXN	74 Outperform	$1.60B	19.20	9.78%	0.89%	4.94%	-1.79%
AVT	72 Outperform	$4.47B	19.47	4.83%	2.37%	-6.55%	-49.61%
ARW	70 Outperform	$6.40B	14.70	7.74%	―	-3.95%	-16.72%
SCSC	69 Neutral	$901.79M	14.83	7.82%	―	-6.72%	-1.14%
NSIT	67 Neutral	$4.04B	31.94	8.67%	―	-7.61%	-50.01%
Sector *	61 Neutral	$34.98B	7.37	-10.82%	1.91%	8.82%	-8.66%

Arrow Electronics Corporate Events

Arrow Electronics Extends Credit Facility to $2 Billion

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.