Arrow Electronics, Inc. (ARW) Stock Analysis and Metrics

Arrow Electronics

NYSE: ARW

$202.57 ▼ -0.94 (-0.46%)

At close: Aug 10, 2026 · 4:00 PM UTC

Financial Ratios

Market Cap11.40 Bn

P/E15.14

P/S0.34

Div. Yield0.00

ROIC (Qtr)0.02

Total Debt (Qtr)2.17 Bn

Revenue Growth (1y) (Qtr)31.82

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About

Arrow Electronics, Inc. sources and engineers technology for thousands of leading manufacturers, service providers, and users of enterprise computing solutions. The company maintains one of the world’s broadest portfolios of product offerings from leading electronic components and enterprise computing solutions suppliers. Equipped with a range of services, solutions, and software, Arrow helps industrial and commercial customers introduce innovative products, reduce time to market, and enhance overall competitiveness.

Arrow generates revenue primarily through the distribution of electronic components and the provision of enterprise computing solutions. The company sells semiconductors, interconnect, passive and electromechanical products, as well as computing, storage, security, and software products. Revenue is derived from sales to original equipment manufacturers, electronics manufacturing services providers, value added resellers, and managed service providers across the globe. In 2025 approximately 70 percent of the company’s sales came from the global components segment while the remaining 30 percent came from the global ECS segment.

The company operates through the following segments: global components and global ECS. Each segment serves distinct customer bases and offers tailored solutions that align with specific market needs.

• global components: This segment markets and distributes electronic components enabled by a comprehensive range of value added capabilities and services.
It provides semiconductor products, interconnect, passive and electromechanical components, and computing and memory products.
The segment offers supply chain services, engineering and design services, integration services, and demand creation activities that help customers deliver innovative products and improve time to market.
Within this segment approximately 72 percent of sales consist of semiconductor products and related services, 16 percent consist of interconnect, passive and electromechanical products, 7 percent consist of computing and memory, and 5 percent consist of other products and services.

• global ECS: This segment is a leading value added provider of comprehensive computing solutions and services.
It offers datacenter, cloud, security, analytics, storage, and networking solutions.
The segment provides engineering and integration support, warehousing and logistics, marketing resources, authorized hardware and software training, and the ArrowSphere platform for managing and scaling as a service businesses.
Within this segment approximately 27 percent of sales consist of software applications, 25 percent consist of storage, 15 percent consist of security, 14 percent consist of compute, 5 percent consist of data intelligence, 5 percent consist of networking, and 9 percent consist of other products and services.

Arrow holds a strong position in the highly competitive global electronics distribution industry, facing competition from other large multinational distributors as well as numerous specialized niche players. The company’s competitive advantages include its extensive product portfolio, deep technical expertise, global logistics footprint, and value added services such as design engineering and supply chain optimization. These capabilities enable Arrow to differentiate itself from pure play distributors and to capture higher margin opportunities. Arrow’s scale allows it to negotiate favorable terms with suppliers while providing customers with access to a broad range of technologies from a single source.

Arrow serves a diverse customer base that includes original equipment manufacturers, electronics manufacturing services providers, value added resellers, managed service providers, and other commercial and industrial users. The company’s customers span industries such as industrial automation, automotive and transportation, computing, networking and communications, and healthcare, among others. No single customer accounted for more than 2 percent of the company’s 2025 consolidated sales indicating a diversified revenue base. Arrow’s sales teams focus on providing technical support and supply chain solutions that help customers reduce costs and improve time to market.

Investment Thesis

▲ Bull case

Arrow delivered a strong start to 2026 with total revenue rising 39% year over year and operating margin expanding 160 basis points to 4.2%. This performance was driven by broad based unit volume growth across all regions and verticals rather than price increases. The company benefited from improving book to bill ratios and a growing backlog that now extends into the third and fourth quarters providing visibility of sustained momentum. These fundamentals indicate that the current recovery is not a temporary bounce but a structural improvement in demand.
Value added services are becoming a larger share of profitability and contributed meaningfully to operating income in the first quarter. Supply chain services engineering and design services and integration services are margin accretive and help Arrow move beyond pure distribution. Management highlighted that the mix of the business is shifting toward higher margin offerings which creates operating leverage as fixed costs stay flat while volume rises. This shift should continue to improve earnings quality and durability over the coming quarters.
The balance sheet shows improving efficiency with cash conversion decreasing by 16 days year over year and return on working capital rising to 23.1%. Return on invested capital increased to 13.4% reflecting better capital deployment. Inventory growth was largely tied to data center activity within Arrow Intelligence Solutions a margin accretive offering that does not sit on the balance sheet as inventory is consigned. These metrics suggest the company is generating more profit from each dollar of working capital and is positioned to fund growth internally.
Arrow announced a new share repurchase authorization of up to one billion dollars signaling confidence in intrinsic value and commitment to returning capital to shareholders. The program replaces the prior authorization and allows flexibility to buy shares as market conditions warrant. Combined with a disciplined capital allocation framework that prioritizes organic growth and selective M&A this should support long term shareholder returns. The company also maintains an investment grade credit profile which provides financial flexibility through cycles.

Arrow delivered a strong start to 2026 with total revenue rising 39% year over year and operating margin expanding 160 basis points to 4.2%. This performance was driven by broad based unit volume growth across all regions and verticals rather than price increases. The company benefited from improving book to bill ratios and a growing backlog that now extends into the third and fourth quarters providing visibility of sustained momentum. These fundamentals indicate that the current recovery is not a temporary bounce but a structural improvement in demand.
Value added services are becoming a larger share of profitability and contributed meaningfully to operating income in the first quarter. Supply chain services engineering and design services and integration services are margin accretive and help Arrow move beyond pure distribution. Management highlighted that the mix of the business is shifting toward higher margin offerings which creates operating leverage as fixed costs stay flat while volume rises. This shift should continue to improve earnings quality and durability over the coming quarters.
The balance sheet shows improving efficiency with cash conversion decreasing by 16 days year over year and return on working capital rising to 23.1%. Return on invested capital increased to 13.4% reflecting better capital deployment. Inventory growth was largely tied to data center activity within Arrow Intelligence Solutions a margin accretive offering that does not sit on the balance sheet as inventory is consigned. These metrics suggest the company is generating more profit from each dollar of working capital and is positioned to fund growth internally.
Arrow announced a new share repurchase authorization of up to one billion dollars signaling confidence in intrinsic value and commitment to returning capital to shareholders. The program replaces the prior authorization and allows flexibility to buy shares as market conditions warrant. Combined with a disciplined capital allocation framework that prioritizes organic growth and selective M&A this should support long term shareholder returns. The company also maintains an investment grade credit profile which provides financial flexibility through cycles.

▼ Bear case

Enterprise Computing Solutions operating margin faced modest pressure declining 10 basis points year over year due to supply constraints around AI related hardware and a charge tied to an under performing multi year contract. The first quarter also benefited from four extra shipping days which added several hundred million dollars of billings that will not repeat in the second quarter. This suggests part of the Q1 strength may be temporary and could lead to a sequential margin contraction as those advantages fade.
Value added services particularly supply chain services are expected to return to a more normal profit level in the second quarter after the stronger than usual contribution in the first quarter. Management noted that the accelerated data center builds that drove the Q1 pull in may not persist at the same pace. If the contribution from these high margin lines normalizes the overall operating margin expansion could slow. This creates reliance on the sustainability of the value added mix to continue delivering margin gains.
Geographic mix poses a risk as the Asia Pacific region which is seasonally strong in the second quarter typically operates at lower margin than the Americas and EMEA. An increase in Asia weighted revenue could drag down overall segment margins even if volume grows. Additionally the company warned that organizational annual compensation increases will begin to affect operating expenses starting in the second quarter which could offset some of the operating leverage gains. These factors may pressure profitability if volume growth does not continue to outpace expense growth.
Macroeconomic uncertainties remain a potential headwind with the company acknowledging risks from unfavorable economic conditions inflation tariffs geopolitical conflict and supply chain disruptions. Although management monitors order flows to detect any pull ahead buying driven by anticipated price increases the memory price exposure while described as mid single digit could still affect end market demand later in the year if prices rise sharply. Any sustained increase in component costs could lead to higher prices for end products and weaken downstream demand jeopardizing the backlog that is being built. These external factors could temper the current recovery and limit the durability of the earnings improvement.

Enterprise Computing Solutions operating margin faced modest pressure declining 10 basis points year over year due to supply constraints around AI related hardware and a charge tied to an under performing multi year contract. The first quarter also benefited from four extra shipping days which added several hundred million dollars of billings that will not repeat in the second quarter. This suggests part of the Q1 strength may be temporary and could lead to a sequential margin contraction as those advantages fade.
Value added services particularly supply chain services are expected to return to a more normal profit level in the second quarter after the stronger than usual contribution in the first quarter. Management noted that the accelerated data center builds that drove the Q1 pull in may not persist at the same pace. If the contribution from these high margin lines normalizes the overall operating margin expansion could slow. This creates reliance on the sustainability of the value added mix to continue delivering margin gains.
Geographic mix poses a risk as the Asia Pacific region which is seasonally strong in the second quarter typically operates at lower margin than the Americas and EMEA. An increase in Asia weighted revenue could drag down overall segment margins even if volume grows. Additionally the company warned that organizational annual compensation increases will begin to affect operating expenses starting in the second quarter which could offset some of the operating leverage gains. These factors may pressure profitability if volume growth does not continue to outpace expense growth.
Macroeconomic uncertainties remain a potential headwind with the company acknowledging risks from unfavorable economic conditions inflation tariffs geopolitical conflict and supply chain disruptions. Although management monitors order flows to detect any pull ahead buying driven by anticipated price increases the memory price exposure while described as mid single digit could still affect end market demand later in the year if prices rise sharply. Any sustained increase in component costs could lead to higher prices for end products and weaken downstream demand jeopardizing the backlog that is being built. These external factors could temper the current recovery and limit the durability of the earnings improvement.

Segments Breakdown of Revenue (2025)

Peer Comparison

Companies in the Electronics & Computer Distribution

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	SNX	Td Synnex Corp	20.07 Bn	17.66	0.29	4.72 Bn
2	ARW	Arrow Electronics, Inc.	11.40 Bn	15.14	0.34	2.17 Bn
3	AVT	Avnet Inc	7.92 Bn	69.24	0.32	2.94 Bn
4	NSIT	Insight Enterprises Inc	4.51 Bn	25.56	0.55	1.48 Bn
5	CNXN	Pc Connection Inc	2.12 Bn	22.15	0.71	-
6	SCSC	Scansource, Inc.	1.14 Bn	15.96	0.37	0.12 Bn
7	CLMB	Climb Global Solutions, Inc.	0.59 Bn	24.91	0.83	-
8	SPRS	Surge Components Inc	0.02 Bn	16.42	0.58	-

Research Tools

Datasets

Plans

Developers

About

Investment Thesis

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer Comparison

Research Tools

Datasets

Plans

Developers

About

Investment Thesis

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer Comparison

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