Avnet (AVT) AI Stock Analysis

Compare

240 Followers

Top Page

Avnet

(NASDAQ:AVT)

Rating:73Outperform

Price Target:

$57.00

▲(11.44%Upside)

Avnet's overall stock score is primarily influenced by its mixed financial performance, with strong cash flow management but declining revenue trends. Technical analysis shows positive momentum, contributing to a favorable outlook. Valuation is reasonable but offers limited upside. The earnings call highlighted both achievements and challenges, affecting sentiment.

Positive Factors

Financial Performance

AVT recently reported F3Q results at or slightly above Street/BofA estimates on better than expected results in Asia and Farnell.

Negative Factors

Earnings Guidance

For the upcoming quarter, revenue and earnings per share guidance are both below Street and BofA estimates.

Market Environment

The demand environment is seen as weak, especially in Europe.

Avnet (AVT) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$4.32B

Dividend Yield2.56%

Average Volume (3M)561.23K

Price to Earnings (P/E)14.4

Beta (1Y)0.94

Revenue Growth-10.52%

EPS Growth-42.40%

CountryUS

Employees15,462

SectorTechnology

Sector Strength84

IndustryTechnology Distributors

Share Statistics

EPS (TTM)0.84

Shares Outstanding83,857,315

10 Day Avg. Volume499,952

30 Day Avg. Volume561,225

Financial Highlights & Ratios

PEG Ratio0.31

Price to Book (P/B)0.98

Price to Sales (P/S)0.00

P/FCF Ratio-5.11

Enterprise Value/Market Cap1.77

Enterprise Value/Revenue0.08

Enterprise Value/Gross Profit3.15

Enterprise Value/Ebitda2.25

Forecast

1Y Price Target

$49.00

Price Target Upside-4.20% Downside

Rating ConsensusModerate Sell

Number of Analyst Covering2

Avnet Business Overview & Revenue Model

Company DescriptionAvnet, Inc. (AVT) is a leading global technology distributor and solutions provider, catering to a diverse range of industries. The company specializes in the distribution and value-added services of electronic components, including semiconductors, interconnect, passive and electromechanical devices. Avnet serves a wide array of sectors such as automotive, industrial, aerospace, and communication, providing comprehensive design, product, marketing, and supply chain solutions.

How the Company Makes MoneyAvnet generates revenue primarily through the distribution of electronic components and embedded solutions. The company procures products from a vast network of suppliers and manufacturers, which are then sold to a diverse customer base including original equipment manufacturers (OEMs), electronic manufacturing services (EMS) providers, and small to medium-sized businesses. Avnet's revenue streams are augmented by value-added services such as supply chain management, logistics, and technical support, which help differentiate its offerings. Key partnerships with leading technology companies and component manufacturers bolster Avnet's extensive product portfolio, enhancing its ability to meet customer needs and maintain a steady stream of income.

Avnet Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q3-2025)

% Change Since: 0.47%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture. While there were notable achievements such as exceeding revenue and EPS expectations, strong cash flow, and growth in Asia, there were also significant challenges like declines in EMEA and Americas, overall revenue decline, and gross margin pressures. The company is actively working on mitigating tariffs and improving its inventory situation, but these challenges remain considerable.

Q3-2025 Updates

Positive Updates

Revenue and EPS Achievement

Avnet achieved sales of $5.3 billion, near the high end of guidance, and adjusted EPS of $0.84, exceeding expectations.

Improved Cash Flow

Generated $141 million of cash flow from operations in the quarter, showing strong financial management.

Growth in Asia

Sales in Asia increased by 13% year-over-year, marking the third consecutive quarter of growth in this region.

Farnell's Positive Performance

Farnell's sales increased 6% sequentially and operating income rose by 3%, indicating a stabilization and slight improvement.

Tariff Mitigation Strategies

Developed strategies to mitigate the impact of tariffs, including leveraging global logistics and offering alternative products.

Negative Updates

Decline in EMEA and Americas

Sales declined 24% in EMEA and 9% in the Americas, indicating weak demand in these regions.

Overall Revenue Decline

Total sales were down 6% both year-over-year and sequentially, reflecting challenging market conditions.

Gross Margin Pressure

Gross margin of 11.1% was 78 basis points lower year-over-year, indicating margin pressure.

Inventory Challenges

Despite efforts to reduce inventory, it only decreased by $57 million in constant currency, showing slower progress than desired.

Company Guidance

During Avnet's third-quarter fiscal year 2025 earnings call, the company reported financial results that exceeded expectations, with sales reaching $5.3 billion and an adjusted EPS of $0.84, both at or above the high end of guidance. The company also generated $141 million in cash flow from operations. The results were driven by improved performance in Asia and Farnell, despite ongoing weaknesses in Western markets, particularly Europe. The global book-to-bill ratio improved, with Asia achieving parity, and IP&E book-to-bill ratios surpassing parity across the company. Avnet highlighted challenges in the semiconductor and IP&E sectors, maintaining stable lead times and pricing. The company noted that the aerospace and defense vertical showed year-over-year growth, while other sectors faced sequential declines. Avnet's guidance for the fourth quarter anticipates sales between $5.15 billion and $5.45 billion, with an EPS range of $0.65 to $0.75, factoring in a flat sales outlook compared to the prior quarter.

Avnet Financial Statement Overview

Summary

Avnet's financial performance is mixed. The income statement shows declining revenue and margins, which are concerning. However, the balance sheet is strong with a solid equity position, and the cash flow statement indicates robust cash generation, highlighting efficient cash management. The company needs to address revenue decline to ensure long-term stability.

Income Statement

Positive

Avnet's income statement shows a declining trend in revenue over recent periods, with TTM revenue at $22.1B compared to $26.5B in 2023. Gross profit margin for TTM is 11.0%, and net profit margin is 1.4%. The EBIT margin is 2.9%, indicating modest operational efficiency. Despite the declining revenue trend, the company maintains some profitability, although at reduced levels.

Balance Sheet

Positive

The balance sheet reflects a strong equity position with stockholders' equity at $11.7B in TTM, resulting in a favorable equity ratio of 100%. However, the debt-to-equity ratio has increased to 0.24, reflecting moderate leverage. While the company has improved its equity base, the increase in debt could pose long-term risks if not managed carefully.

Cash Flow

Positive

Avnet's cash flow statement shows healthy cash flow generation with operating cash flow at $859M and free cash flow at $745M for TTM. The operating cash flow to net income ratio is a strong 2.71, highlighting efficient cash conversion. The free cash flow has grown significantly from previous periods, indicating robust cash management capabilities.

TTM	Jun 2024	Sep 2023	Sep 2022	Sep 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
22.15B	23.76B	26.54B	24.31B	19.53B	17.63B
	Gross Profit
2.43B	2.77B	3.18B	2.97B	2.24B	2.06B
	EBIT
633.41M	896.92M	1.19B	939.01M	281.41M	220.60M
	EBITDA
727.72M	1.06B	1.38B	1.09B	451.10M	237.53M
	Net Income Common Stockholders
316.79M	498.70M	770.83M	692.38M	193.11M	-29.53M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
188.91M	310.94M	288.23M	153.69M	199.69M	477.04M
	Total Assets
11.71B	12.21B	12.48B	10.39B	8.93B	8.11B
	Total Debt
2.83B	3.13B	3.30B	1.87B	1.51B	1.73B
	Net Debt
2.64B	2.82B	3.01B	1.71B	1.31B	1.25B
	Total Liabilities
6.83B	7.28B	7.73B	6.20B	4.84B	4.38B
	Stockholders Equity
4.88B	4.93B	4.75B	4.19B	4.08B	3.73B
Cash Flow		Free Cash Flow
745.14M	463.51M	-908.38M	-268.21M	40.59M	656.67M
	Operating Cash Flow
859.28M	689.98M	-713.70M	-219.31M	90.95M	730.18M
	Investing Cash Flow
-103.42M	-225.48M	-211.55M	51.30M	-61.20M	-135.02M
	Financing Cash Flow
-763.00M	-433.80M	1.05B	156.06M	-314.01M	-644.55M

Avnet Technical Analysis

Technical Analysis Sentiment

Positive

Last Price51.15

Price Trends

50DMA

49.36

Positive

100DMA

49.24

Positive

200DMA

50.93

Positive

Market Momentum

MACD

0.45

Positive

RSI

53.71

Neutral

STOCH

44.86

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVT, the sentiment is Positive. The current price of 51.15 is above the 20-day moving average (MA) of 50.62, above the 50-day MA of 49.36, and above the 200-day MA of 50.93, indicating a bullish trend. The MACD of 0.45 indicates Positive momentum. The RSI at 53.71 is Neutral, neither overbought nor oversold. The STOCH value of 44.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AVT.

Avnet Risk Analysis

Avnet disclosed 19 risk factors in its most recent earnings report. Avnet 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

Avnet Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SANM	79 Outperform	$4.70B	20.58	11.03%	―	-1.50%	1.84%
AVT	73 Outperform	$4.32B	14.44	6.42%	2.56%	-10.52%	-42.40%
ARW	71 Outperform	$6.48B	17.09	6.68%	―	-11.13%	-43.00%
SNX	70 Outperform	$10.50B	15.64	8.40%	1.41%	4.62%	16.28%
NSIT	68 Neutral	$4.21B	26.70	11.37%	―	-8.73%	-35.37%
SCSC	67 Neutral	$922.35M	14.63	7.32%	―	-14.07%	-9.65%
Sector *	62 Neutral	$11.96B	10.09	-7.50%	3.10%	7.33%	-8.11%

* Technology Sector Average

Performance Comparison

AVT

Avnet

51.15

0.18

0.35%

ARW

Arrow Electronics

123.49

-2.96

-2.34%

NSIT

Insight Enterprises

134.19

-69.12

-34.00%

SANM

Sanmina-Sci

90.05

23.58

35.47%

SCSC

ScanSource

40.71

-3.45

-7.81%

SNX

TD SYNNEX Corporation

124.64

-4.60

-3.56%

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.