Arrow Electronics, Inc. (NYSE: ARW)

Sector: Technology Industry: Electronics & Computer Distribution CIK: 0000007536
Market Cap 7.91 Bn
P/B 1.20
P/E 13.85
P/S 0.26
ROIC (Qtr) 6.56
Div Yield % 0.00
Rev 1y % (Qtr) 20.10
Total Debt (Qtr) 3.09 Bn
Debt/Equity (Qtr) 0.47
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About

Arrow Electronics, Inc., often simply referred to as Arrow, operates in the electronics industry, providing products, services, and solutions to a diverse range of customers, including original equipment manufacturers (OEMs), value-added resellers (VARs), managed service providers (MSPs), contract manufacturers (CMs), and other commercial entities. The company, which was established in New York in 1946, has a global footprint, with operations spanning across numerous countries. At its core, Arrow operates in two main segments: the global components...

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Investment thesis

Bull case

  • Healthy cash reserves of 306.47M provide 898.73x coverage of short-term debt 341000, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 26.88B provides 8.71x coverage of total debt 3.09B, indicating robust asset backing and low credit risk.
  • Tangible assets of 26.88B provide robust 18.40x coverage of other current liabilities 1.46B, indicating strong asset backing.
  • Robust tangible asset base of 26.88B provides 3.94x coverage of working capital 6.81B, indicating strong operational backing.
  • Retained earnings of 6.55B provide full 2.12x coverage of long-term debt 3.08B, indicating strong internal capital position.

Bear case

  • With cash reserves of 306.47M against inventory of 5.08B, the 0.06 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Free cash flow of (37.20M) provides weak coverage of capital expenditures of 101.25M, with a -0.37 ratio suggesting additional external financing needs for growth initiatives.
  • High receivables of 19.74B relative to inventory of 5.08B (3.88 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • The company's operating cash flow of 64.05M shows concerning coverage of stock compensation expenses of 27.88M, with a 2.30 ratio indicating potential earnings quality issues.
  • Operating cash flow of 64.05M provides minimal 0.43x coverage of tax expenses of 148.23M, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Segments Breakdown of Revenue (2025)

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 ARW Arrow Electronics, Inc. 7.91 Bn 13.85 0.26 3.09 Bn
2 SNX Td Synnex Corp 6.38 Bn 23.20 0.33 4.61 Bn
3 AVT Avnet Inc 5.42 Bn 26.12 0.23 3.17 Bn
4 NSIT Insight Enterprises Inc 2.61 Bn 16.60 0.32 1.36 Bn
5 CNXN Pc Connection Inc 1.63 Bn 18.18 0.51 0.00 Bn
6 SCSC Scansource, Inc. 0.82 Bn 11.15 0.27 0.10 Bn
7 CLMB Climb Global Solutions, Inc. 0.51 Bn 80.43 1.89 0.00 Bn
8 IZM ICZOOM Group Inc. 0.01 Bn 10.40 0.07 -

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.37 0.78
EV to Cash from Ops. EV/CFO 169.08 117.90
EV to Debt EV to Debt 3.51 438.44
EV to EBIT EV/EBIT 11.59 15.47
EV to EBITDA EV/EBITDA 11.28 13.22
EV to Free Cash Flow [EV/FCF] EV/FCF -291.07 113.72
EV to Market Cap EV to Market Cap 1.37 1.17
EV to Revenue EV/Rev 0.35 0.54
Price to Book Value [P/B] P/B 1.20 2.70
Price to Earnings [P/E] P/E 13.85 21.87
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 2.26
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 11.51
Dividend per Basic Share Div per Share (Qtr) 0.00 0.49
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 10.45
Interest Coverage Int. cover (Qtr) 4.34 -0.62
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -15.66 9.50
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 62.32 97.84
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 6.75
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 21.86 -1,335.47
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 3.05 -783.61
EBIT Growth (1y) % EBIT 1y % (Qtr) 23.34 -8,097.95
EBT Growth (1y) % EBT 1y % (Qtr) 47.47 -8,103.00
EPS Growth (1y) % EPS 1y % (Qtr) 49.86 22.53
FCF Growth (1y) % FCF 1y % (Qtr) -103.57 -1,628.21
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 5.29 3.71
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.06 2.10
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.07
Cash Ratio Cash Ratio (Qtr) 0.02 0.63
Current Ratio Curr Ratio (Qtr) 1.36 2.37
Debt to Equity Ratio Debt/Equity (Qtr) 0.47 0.40
Interest Cover Ratio Int Coverage (Qtr) 4.34 -0.62
Times Interest Earned Times Interest Earned (Qtr) 4.34 -0.62
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 3.50 0.27
EBIT Margin % EBIT Margin % (Qtr) 3.03 -0.41
EBT Margin % EBT Margin % (Qtr) 2.33 -0.82
Gross Margin % Gross Margin % (Qtr) 11.20 12.10
Net Profit Margin % Net Margin % (Qtr) 1.90 -1.39