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1. Company Snapshot

1.a. Company Description

Avnet, Inc., a technology solutions company, markets, sells, and distributes electronic components.The company operates through two segments, Electronic Components and Farnell.The Electronic Components segment markets, sells, and distributes semiconductors; interconnect, passive, and electromechanical devices; and other integrated components from electronic component manufacturers.


It also offers design chain support that provides engineers with technical design solutions; engineering and technical resources to support product design, bill of materials development, and technical education and training; and supply chain solutions that provide support and logistical services to original equipment manufacturers, electronic manufacturing service providers, and electronic component manufacturers.In addition, this segment provides integrated solutions, such as technical design, integration, and assembly of embedded products, and systems and solutions primarily for industrial applications, as well as for intelligent and innovative embedded display solutions comprising touch and passive displays.Further, it develops and manufactures standard board and industrial subsystems, and application-specific devices that enable it to produce systems tailored to specific customer requirements.


This segment serves various markets, such as automotive, medical, defense, aerospace, telecommunications, industrial, and digital editing.The Farnell segment distributes kits, tools, and electronic and industrial automation components, as well as test and measurement products to engineers and entrepreneurs.It has operations in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.


Avnet, Inc.was founded in 1921 and is headquartered in Phoenix, Arizona.

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1.b. Last Insights on AVT

Avnet's recent performance was positively driven by its Q4 earnings beat, with quarterly earnings of $0.81 per share exceeding the Zacks Consensus Estimate of $0.72 per share. The company's revenue rose 1% to $5,617.8 million. Additionally, Avnet's international revenue trends are being closely watched by financial analysts, and the company's stable margins and strong cash flow are notable. A 6% increase in quarterly dividend also underscores the company's commitment to shareholder value. (Source: Zacks)

1.c. Company Highlights

2. Avnet's Q2 FY2026 Earnings Exceed Expectations

Avnet reported a strong second quarter fiscal year 2026, with sales reaching $6.3 billion, exceeding the high end of their guidance range. The company's Electronic Components business achieved a 3.2% operating margin, while Farnell reported a 4.7% operating margin. Adjusted diluted earnings per share came in at $1.05, surpassing the estimated $0.95. Gross margin stood at 10.5%, relatively stable year over year and up slightly sequentially. The company's cash flow from operations was over $200 million, and inventory dollars and days were reduced as projected.

Publication Date: Feb -19

📋 Highlights
  • Outperformed Guidance:: Sales of $6.3B exceeded high end of guidance, with EPS of $1.05 surpassing expectations.
  • Margin Expansion:: Electronic Components margin at 3.2% and Farnell at 4.7%, with Farnell’s gross margin up 100 bps YoY.
  • Asia Sales Growth:: Asia sales hit $3B (record high), up 17% YoY, driven by six consecutive quarters of growth.
  • Cash Flow Strength:: Generated >$200M in operating cash flow, reducing inventory days and dollars as planned.
  • EPS Guidance Raised:: 2026 EPS guidance raised to $1.20–$1.30, with March 2026 quarter expected to benefit from West seasonality and lower Lunar New Year impact.

Regional Performance

Avnet's regional sales performance was robust, with Asia reaching a record high of over $3 billion, marking the sixth consecutive quarter of year-on-year sales growth. Sales in Europe and the Americas also increased by 8% and 5%, respectively, on a year-over-year basis. The company's demand creation revenues increased sequentially by 7%, driven by the efforts of field application engineers. As Philip R. Gallagher noted, "Demand increased across most verticals and geographies we serve for both the year-on-year and sequential compares."

Outlook and Guidance

Avnet's guidance for fiscal year 2026 is in the range of $6.2 billion to $6.5 billion in sales, with diluted earnings per share expected to be between $1.20 and $1.30. Analysts estimate next year's revenue growth at 6.0%. The company's ability to manage inventory and improve operating margins is expected to drive future growth.

Valuation

Avnet's current valuation metrics indicate a Price-to-Earnings (P/E) ratio of 25.65 and a Price-to-Sales (P/S) ratio of 0.23. The company's Return on Equity (ROE) stands at 4.22%, and its Return on Invested Capital (ROIC) is 4.98%. With a Dividend Yield of 2.08%, Avnet offers a relatively attractive income stream. Given the company's strong earnings performance and guidance, its valuation multiples may be justified, but investors should continue to monitor the company's ability to sustain its growth momentum.

3. NewsRoom

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Elo Mutual Pension Insurance Co Makes New $665,000 Investment in Avnet, Inc. $AVT

Mar -07

Source: defenseworld.net

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Avnet, Inc. (AVT) Presents at 47th Annual Raymond James Institutional Investor Conference Transcript

Mar -02

Source: seekingalpha.com

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GSA Capital Partners LLP Makes New $616,000 Investment in Avnet, Inc. $AVT

Feb -23

Source: defenseworld.net

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Avnet to Participate in the Raymond James Institutional Investors Conference on March 2

Feb -18

Source: businesswire.com

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Advisors Asset Management Inc. Has $2.06 Million Stock Position in Avnet, Inc. $AVT

Feb -16

Source: defenseworld.net

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5 Broker-Adored Stocks to Watch Amid Fears of AI Disruption

Feb -13

Source: zacks.com

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Should You Buy Avnet (AVT) After Golden Cross?

Feb -09

Source: zacks.com

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Here is Why Growth Investors Should Buy Avnet (AVT) Now

Feb -02

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.55%)

6. Segments

Electronic Components

Expected Growth: 8.5%

Avnet's Electronic Components segment growth of 8.5% is driven by increasing demand for IoT and AI-enabled devices, rising adoption of 5G technology, and growing need for autonomous vehicles. Additionally, the company's strategic acquisitions and partnerships have expanded its customer base and enhanced its product offerings, contributing to the segment's growth.

Farnell

Expected Growth: 9.27%

Farnell's 9.27% growth is driven by increasing demand for electronic components in IoT, AI, and 5G applications. Strong online presence, expanded product offerings, and strategic partnerships also contribute to growth. Additionally, Farnell's focus on digital transformation, improved customer experience, and operational efficiency further support its growth momentum.

7. Detailed Products

Electronic Components

Avnet offers a wide range of electronic components from leading manufacturers, including semiconductors, interconnects, passive and electromechanical components, and embedded systems.

Embedded Systems

Avnet provides embedded systems solutions, including single-board computers, system-on-modules, and development kits, for industrial, medical, and consumer applications.

Internet of Things (IoT) Solutions

Avnet offers IoT solutions, including hardware, software, and services, to connect and manage devices, sensors, and data analytics.

Cybersecurity Solutions

Avnet provides cybersecurity solutions, including threat detection, incident response, and security consulting services, to protect against cyber threats.

Data Center and Cloud Solutions

Avnet offers data center and cloud solutions, including servers, storage, and networking solutions, for enterprise and cloud service providers.

Supply Chain Services

Avnet provides supply chain services, including inventory management, logistics, and procurement, to optimize the supply chain for OEMs and EMS providers.

Design and Engineering Services

Avnet offers design and engineering services, including hardware and software design, prototyping, and testing, for product development.

8. Avnet, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Avnet's customers have some alternatives for their products and services, but the switching costs are relatively high, which reduces the threat of substitutes.

Bargaining Power Of Customers

Avnet's customers have significant bargaining power due to their large size and purchasing power, which allows them to negotiate better prices and terms.

Bargaining Power Of Suppliers

Avnet has a diverse supplier base, which reduces the bargaining power of individual suppliers, and the company's large size and purchasing power also give it an upper hand in negotiations.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the electronics distribution industry, including the need for significant capital investment and established relationships with suppliers and customers.

Intensity Of Rivalry

The electronics distribution industry is highly competitive, with several large players competing for market share, which leads to intense rivalry and pricing pressure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.99%
Debt Cost 9.69%
Equity Weight 59.01%
Equity Cost 10.07%
WACC 9.92%
Leverage 69.47%

11. Quality Control: Avnet, Inc. passed 4 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

Stock-Card
InterDigital

A-Score: 6.6/10

Value: 3.7

Growth: 8.8

Quality: 9.0

Yield: 3.0

Momentum: 9.5

Volatility: 5.7

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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

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Avnet

A-Score: 5.5/10

Value: 7.3

Growth: 5.4

Quality: 3.2

Yield: 6.0

Momentum: 3.0

Volatility: 8.0

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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

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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

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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 ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

61.55$

Current Price

61.55$

Potential

-0.00%

Expected Cash-Flows