Arrow Electronics, Inc. (ARW) | Investment Case

1. Company Snapshot

1.a. 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.

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1.b. Last Insights on ARW

The recent performance of Arrow Electronics, Inc. has been driven by several positive factors. The company's Q4 earnings and revenue beat expectations, with quarterly earnings of $4.39 per share surpassing the Zacks Consensus Estimate of $3.55 per share. This strong earnings performance has led to a golden cross signal, with the 50-day simple moving average breaking out above the 200-day moving average, indicating a potential uptrend. Additionally, insider buying activity has been a positive driver, with the CEO purchasing additional shares in the company, and other institutional investors such as AQR Capital Management LLC and Atria Investments Inc. increasing their holdings in the company. The company's stock price has also reached a new 52-week high, with the stock trading as high as $161.03 and last trading at $158.81. Furthermore, analysts have set a price target of $117.33 for the company, indicating a potential upside for investors. The company's CEO has also been actively buying shares, with the most recent purchase of 3,960 shares dated February 19th. Overall, these positive factors have contributed to the company's recent performance.

1.c. Company Highlights

Last Price	140.05
Change Percentage	0.15%
Open	138.75
Previous Close	139.84
Market Cap ( Millions)	7214
Volume	28321
Year High	162.61
Year Low	86.5
M A 50	133.39
M A 200	123.68

FCF Yield	0.51%
Dividend Yield	0.00%
ROE	9.05%
Debt / Equity	46.85%
Net Debt / EBIDTA	286.63%
Price To Book	1.09
Price Earnings Ratio	12.61
Price To FCF	196.74
Price To sales	0.23
EV / EBITDA	10.31

2. Arrow Electronics Delivers Strong Q4 2025 Results

Arrow Electronics reported a robust fourth quarter 2025, with revenue increasing 20% year-over-year to $8.7 billion, exceeding expectations. Non-GAAP diluted EPS also showed significant growth, rising 48% to $4.39, surpassing the estimated $3.55. The company's non-GAAP operating income was $336 million, representing 3.8% of sales. The strong performance was driven by both the global components and ECS businesses, with the latter delivering record gross profit and operating profit in the quarter.

Publication Date: Feb -16

                                    📋 Highlights
                                    Q4 Revenue & EPS Growth::
                                                Revenue rose 20% YoY to $8.7B, non-GAAP EPS surged 48% to $4.39.
Global Components Performance::
                                                Sales grew 6% QoQ to $5.9B; operating income increased $20M sequentially to $219M.
ECS Segment Expansion::
                                                Sales climbed $400M YoY to $2.9B, with total billings of $7.1B (+16% YoY) driven by hybrid cloud and cybersecurity demand.
Shareholder Returns::
                                                $50M in stock repurchases in Q4; $150M in 2025, part of a $3.6B total returned since 2020.
Q1 Guidance::
                                                Sales projected at $7.95B–$8.55B (+21% YoY midpoint); non-GAAP EPS guidance $2.70–$2.90.

                                

Segment Performance

Global components sales increased 6% sequentially to $5.9 billion, driven by a gradual recovery in demand. The ECS business also performed well, with sales rising 16% year-over-year to $2.9 billion, driven by strong secular demand trends in areas such as hybrid cloud, infrastructure hardware, and cybersecurity. Total ECS billings were $7.1 billion, up 16% year-over-year, with hardware accounting for 25% of revenue and software, cloud, and services making up the remaining 75%.

Guidance and Outlook

For Q1 2026, Arrow expects sales to be between $7.95 billion and $8.55 billion, representing a 21% year-over-year increase at the midpoint. The company is cautiously optimistic about the market outlook, with demand levels improving in many markets, but notes that inventory normalization and macroeconomic uncertainty are creating uncertainty. Analysts estimate revenue growth of 4.5% for the next year, which may be a reasonable expectation given the company's historical performance.

Valuation

Arrow's current valuation multiples are relatively reasonable, with a P/E Ratio of 14.06 and an EV/EBITDA of 11.17. The company's ROE is 9.05%, and ROIC is 6.7%, indicating a decent return on equity and invested capital. The Net Debt / EBITDA ratio is 2.87, which is manageable. Given the company's strong Q4 performance and guidance, the stock may be poised for further upside, but investors should monitor the company's ability to execute on its growth initiatives and manage working capital investment, which is expected to increase in the near term.

3. NewsRoom

American Century Companies Inc. Reduces Holdings in Arrow Electronics, Inc. $ARW

Mar -09

Source: defenseworld.net

4 Value Stocks to Buy as Middle East Tensions Keep Markets on Edge

Mar -05

Source: zacks.com

Arrow Electronics, Inc. (ARW) Presents at 47th Annual Raymond James Institutional Investor Conference Transcript

Mar -04

Source: seekingalpha.com

5 Broker-Liked Stocks to Monitor Amid the Ongoing Volatility

Mar -04

Source: zacks.com

Is Arrow Electronics Stock a Buy or Sell After a Vice President Dumped Over 4,000 Shares?

Mar -01

Source: fool.com

4 Low-PEG Value Stocks for Smarter Portfolio Growth Today

Feb -26

Source: zacks.com

Are Computer and Technology Stocks Lagging Arrow Electronics (ARW) This Year?

Feb -26

Source: zacks.com

Arrow Electronics to Present at Upcoming Investor Conference

Feb -25

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.54%)

6. Segments

Global Components

Expected Growth: 5%

Arrow Electronics' Global Components segment growth is driven by increasing demand for IoT devices, rising adoption of cloud computing, and growing need for electronic components in automotive and industrial applications. Additionally, the company's strategic acquisitions and expanded distribution agreements have enhanced its product offerings and geographic reach, contributing to its 5% growth.

Global Enterprise Computing Solutions

Expected Growth: 3%

Arrow Electronics' Global Enterprise Computing Solutions segment growth is driven by increasing demand for cloud-based services, digital transformation, and cybersecurity solutions. Additionally, the rise of IoT, AI, and 5G technologies fuels growth in edge computing, data analytics, and storage. Furthermore, the need for efficient IT infrastructure and cost optimization also contributes to the segment's growth.

7. Detailed Products

Electronic Components

Arrow Electronics offers a wide range of electronic components from leading manufacturers, including semiconductors, passives, electromechanical components, and connectors.

Enterprise Computing Solutions

Arrow Electronics provides enterprise computing solutions, including data center infrastructure, cloud services, and cybersecurity solutions.

Internet of Things (IoT) Solutions

Arrow Electronics offers IoT solutions, including hardware, software, and services for IoT device design, development, and deployment.

Cloud and Hybrid IT Solutions

Arrow Electronics provides cloud and hybrid IT solutions, including cloud migration, management, and security services.

Cybersecurity Solutions

Arrow Electronics offers cybersecurity solutions, including threat detection, incident response, and security consulting services.

Data Analytics and Artificial Intelligence (AI) Solutions

Arrow Electronics provides data analytics and AI solutions, including data management, analytics, and machine learning services.

Supply Chain and Logistics Services

Arrow Electronics offers supply chain and logistics services, including inventory management, shipping, and warehousing.

8. Arrow Electronics, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Arrow Electronics, Inc. is medium due to the presence of alternative electronic components and services offered by competitors.

Bargaining Power Of Customers

The bargaining power of customers for Arrow Electronics, Inc. is low due to the company's diverse customer base and lack of concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Arrow Electronics, Inc. is medium due to the presence of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants for Arrow Electronics, Inc. is low due to the high barriers to entry in the electronic components industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Arrow Electronics, Inc. is high due to the presence of several established competitors in the electronic components industry, leading to intense competition for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	39.61%
Debt Cost	10.89%
Equity Weight	60.39%
Equity Cost	10.89%
WACC	10.89%
Leverage	65.58%

11. Quality Control: Arrow Electronics, Inc. passed 3 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

InterDigital

A-Score: 6.6/10

Value: 3.7

Growth: 8.8

Quality: 9.0

Yield: 3.0

Momentum: 9.5

Volatility: 5.7

1-Year Total Return ->

TD Synnex

A-Score: 5.7/10

Value: 6.1

Growth: 5.6

Quality: 4.4

Yield: 2.0

Momentum: 8.0

Volatility: 8.3

1-Year Total Return ->

Avnet

A-Score: 5.5/10

Value: 7.3

Growth: 5.4

Quality: 3.2

Yield: 6.0

Momentum: 3.0

Volatility: 8.0

1-Year Total Return ->

PC Connection

A-Score: 5.1/10

Value: 5.6

Growth: 5.7

Quality: 6.0

Yield: 2.0

Momentum: 2.5

Volatility: 8.7

1-Year Total Return ->

Arrow Electronics

A-Score: 4.8/10

Value: 6.7

Growth: 6.6

Quality: 3.9

Yield: 0.0

Momentum: 4.0

Volatility: 7.7

1-Year Total Return ->

Insight Enterprises

A-Score: 4.3/10

Value: 7.0

Growth: 6.9

Quality: 4.3

Yield: 0.0

Momentum: 1.0

Volatility: 6.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

100.00%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.89%

Arrow Electronics, Inc. - US0427351004

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ARW

1.c. Company Highlights

Less Volatile

Cheaper

Average Growth

Earnings Beats

Revenues Miss

Revenues Beats

Stable Momentum

Earnings Miss

Fairly Valued

Average Quality

2. Arrow Electronics Delivers Strong Q4 2025 Results

Segment Performance

Guidance and Outlook

Valuation

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.54%)

6. Segments

Global Components

Expected Growth: 5%

Global Enterprise Computing Solutions

Expected Growth: 3%

7. Detailed Products

Electronic Components

Enterprise Computing Solutions

Internet of Things (IoT) Solutions

Cloud and Hybrid IT Solutions

Cybersecurity Solutions

Data Analytics and Artificial Intelligence (AI) Solutions

Supply Chain and Logistics Services

8. Arrow Electronics, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Arrow Electronics, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

-12.68$

Current Price

140.05$

Potential

-109.05%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA