Arrow Electronics Intrinsic Stock Value – Examining Arrow Electronics’ Intrinsic Value: Is the Price Justified?
November 7, 2023
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Analyzing Arrow Electronics ($NYSE:ARW), Inc.’s intrinsic value is an important part of making an informed decision when considering investing in the company. Arrow Electronics is a global technology and distribution company specialized in providing products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions. The company is known for its excellent customer service, advanced supply chain solutions, and industry-leading inventory and distribution capabilities.
However, before investing in Arrow Electronics, it is important to consider whether the company’s stock price is justified. Investors should evaluate the company’s fundamentals such as revenue, profits, and cash flow from operations. They should also assess the company’s growth prospects and competitive advantage in its industry.
Additionally, investors should consider the risk associated with investing in Arrow Electronics as well as the current market trends that may affect the company’s future performance. By examining these factors, investors can make an informed decision regarding whether or not the stock price of Arrow Electronics is justified.
Price History
Monday’s stock activity for ARROW ELECTRONICS saw a small 0.6% decline from last closing price of $121.0, opening at $120.7 and closing at $120.3. This begs the question: is the price of the stock justified? In order to answer this, we must look into the intrinsic value of ARROW ELECTRONICS to determine if the current stock price is a good deal for investors. One way to measure the intrinsic value of a company is to calculate the discounted cash flow (DCF) of its stock. The DCF model takes into account a company’s future cash flows and discounts them to present value, allowing investors to gain an understanding of what the company is worth in today’s money. This can be compared to the current stock price of ARROW ELECTRONICS to determine if the price of the stock is justified or if it is overvalued.
Another key indicator that can be used to evaluate a company’s intrinsic value is its price-to-earnings ratio (P/E). This metric divides the company’s current stock price by its earnings per share and allows investors to compare the company’s valuation to that of its peers. By comparing the P/E ratio of ARROW ELECTRONICS with other companies in its industry, investors can see if the current price is in line with other players in the market. In conclusion, when looking at both the DCF model and P/E ratio, investors can get a better understanding of ARROW ELECTRONICS’ intrinsic value and determine if the stock price is justified or if it is overvalued. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Arrow Electronics. More…
| Total Revenues | Net Income | Net Margin |
| 34.58k | 1.06k | 3.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Arrow Electronics. More…
| Operations | Investing | Financing |
| 527.39 | -70.55 | -560.79 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Arrow Electronics. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 20.64k | 15.08k | 101.28 |
Key Ratios Snapshot
Some of the financial key ratios for Arrow Electronics are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 7.9% | 27.9% | 4.9% |
| FCF Margin | ROE | ROA |
| 1.3% | 19.1% | 5.1% |
Analysis – Arrow Electronics Intrinsic Stock Value
GoodWhale recently conducted an analysis of ARROW ELECTRONICS‘s wellbeing. After careful consideration, we have determined that ARROW ELECTRONICS shares have an intrinsic value of around $140.9, calculated using our proprietary Valuation Line. Currently, the stock is trading at a fair price of $120.3, representing an undervaluation of 14.6%. This presents a significant opportunity for investors to acquire ARROW ELECTRONICS for a bargain price. With this in mind, it is worth considering purchasing ARROW ELECTRONICS shares in order to take advantage of a potential long-term return. More…
Peers
Arrow Electronics Inc is one of the leading global distributors of electronic components and enterprise computing solutions. Its main competitors are Avnet Inc, Samsung Electro-Mechanics Co Ltd, and WPG Holding Co Ltd.
– Avnet Inc ($NASDAQ:AVT)
Avnet Inc is an American technology company headquartered in Phoenix, Arizona. The company is a distributor of electronic components, computer products and embedded technology. Avnet was founded in 1921 and has been publicly traded on the New York Stock Exchange since 1963.
As of 2021, Avnet has a market capitalization of $4.14 billion and a return on equity of 16.09%. The company is a distributor of electronic components, computer products and embedded technology. Avnet was founded in 1921 and has been publicly traded on the New York Stock Exchange since 1963.
– Samsung Electro-Mechanics Co Ltd ($KOSE:009150)
Samsung Electro-Mechanics Co Ltd is a South Korean electronics company that specializes in the manufacture of electronic components and devices. The company has a market capitalization of 10.31 trillion as of 2022 and a return on equity of 14.53%. Samsung Electro-Mechanics is a subsidiary of the Samsung Group and its products are used in a wide range of electronic devices, including mobile phones, televisions, computers and digital cameras.
– WPG Holding Co Ltd ($TWSE:3702)
WPG Holding Co Ltd is a leading electronics manufacturer and distributor in Greater China. The company has a market cap of $78.92 billion as of 2022 and a return on equity of 14.11%. WPG Holding Co Ltd is a vertically integrated company with a strong presence in the upstream and downstream segments of the electronics manufacturing value chain. The company has a diversified product portfolio that includes semiconductors, passive components, displays, and assembly and test services. WPG Holding Co Ltd is a major supplier to global electronics brands such as Apple, Huawei, and Xiaomi.
Summary
A deeper analysis into Arrow Electronics, Inc. reveals that it may be trading at a premium due to its high quality service and offerings. Through an intrinsic value analysis, it can be concluded that the company has strong fundamentals that justify its current price. This includes a strong balance sheet with low debt levels, consistent cash flow, and a good return on capital.
Other strengths include its wide product and service offerings, solid customer base, and experienced management team. All of these factors make Arrow Electronics a good long-term investment for investors willing to pay a higher price.
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