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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Arrow Electronics, Inc. (XNYS:ARW) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ARW
Name:
ARROW ELECTRONICS, INC. (XNYS:ARW)
Sector:
- 219518.00K
Industry:
Electronics & Computer Distribution
CEO:
Mr. Michael Long
Total Employees:
20,700
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -1318.64% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ARROW ELECTRONICS, INC.(ARW) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ELECTRONICS & COMPUTER DISTRIBUTION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
102.7
One Month Price Target:
$103.5
Six Month Price Target :
$107.5
Likely Price in One Year's Time:
Ticker:
$112.31
Likely Trading Range Today Under (Normal Volatility)
$102.36
Price Upper limit ($) :
$103.16
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$97.93
This week:
$92.03
This month :
$81.37
Other Primary facts
Market Cap:
6.45B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
64.17M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.01%
-15.13%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$124.83
$114.64
$80.57
$90.76
Medium risk (<10%) entry points
Buy Call
Sell Call
$111.32
Buy Put:
Sell Put:
$109.14
$94.05
$96.26
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ARW
Sharpe Ratio:
2.10%
Comparison:
ARW, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 93.01% higher than the industry
& is -7.93% lower than the market/S&P 500 average
Average Returns/Yield of
ARW
Daily returns:
0.06%
Weekly returns:
0.28%
Monthly returns:
1.14%
Yearly returns:
8.65%
Comparison of returns:
Average annual returns/yield (last 3 years) is 57.81% above industry average
Classification:
ARW, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.71
Statistical test of Returns:
ARW has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.29%
Weekly Volatility:
5.12%
Monthly Volatility:
10.24%
Yearly Volatility:
35.46%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.48%
Volatility in last five trading days has been -79.11% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.64%
Weekly VaR:
-10.39%
Monthly VaR:
-20.77%
How Much Can the price of
ARW
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-71.95%
This translates to price declining to:
$84.51
This translates to price declining to:
$28.81
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
ARW is a 46.59% riskier investment compared to the market/S&P 500 & is 25.59% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -15.69% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ARW
Beta in relation to market/S&P 500--1.39
Expected beta in 1 year's time:
0.901
Expected beta in 3 year's time:
1.274
Unlevered (debt free) Beta:
0.994
Beta in relation to Nasdaq (XNAS):
0.864
Beta in relation to all global stocks::
0.753
Beta Comparison & Analysis
Beta of competitors/peers::
1.567
Beta is -11.15% lower than peers
Average Industry Beta:
1.187
Beta is 17.25% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
21.28%
Sustainable growth rate is 77.67% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.010
Alpha is -136.68% below industry average alpha yield
Alpha is 61% compared to market & is healthy
Analysis of Cost of Capital of
ARW
Equity cost of capital:
0.127
Equity cost of capital is 12.43% above industry mean WACC
Unlevered (without debt) cost of capital:
9.06%
Before-tax cost of debt:
2.16%
After-tax cost of debt:
1.71%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.71%
WACC is -1.71% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$547.98
Revenue growth rate per share of (3Y):
1.21
Annual revenue growth rate is 30.17% above the industry average
EPS:
$17.79
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$2.09
-
-
Debt per share
$43.49
EBITDA per share
$29.68
Valuation Analysis Today of
ARW
P/E Ratio:
5.11
P/E Ratio of Competitors/Peers:
23.02
P/E ratio is -77.81% lower than main peers & is -57.90% lower than the industry
Stock price/value with industry average P/E ratio: $215.90
ARW is -52.43% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.19
Price to sales ratio is -62.76% below the industry mean
P/B (Price to book value ratio):
1.21
Price to free cash flow: 49.22
-
Net income growth rate (3Y):
73.55%
Net income growth rate is -262.41% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
51.97%
Net debt to equity ratio:
53.36%
Debt to assets ratio:
14.30%
Net debt to assets ratio:
14.68%
Debt-to-asset ratio is -73.84% below industry average
Ability to repay debt:
Interest coverage ratio:
28.37
Interest coverage ratio is 139.06% more than industry average
Looking forward:
Debt growth rate:
16.42%
Annual debt growth is -192% lower than industry average debt growth rate
Debt repayment rate in last quarter: 11.14%
Analysis of Key Statistics
Correlation of price movement with the market:
0.752
Statistical significance of correlation:
ARW has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.551
Stock price is 36.59% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.551
Correlation of price movement with Nasdaq (^IXIC):
0.019
Covariance of price movement with the market:
0.025
Kurtosis
8.214
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.416
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
ARW
Gross Profit Margin Ratio:
51%
Operating Profit Margin Ratio:
5.03%
Operating profit margin is 239.80% higher than the industry
Net Profit Margin Ratio:
51%
Effective Tax Rate:
22.91%
Effective tax rate is 48.15% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
23.59%
Return on equity (ROE) is 143.04% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
6.49%
Return on assets (ROA) is 64.51% higher than the industry
Financial Leverage:
1.2x
Current Ratio:
1.49
Current ratio is -25.12% below industry average
Cash Conversion Cycle (days):
1.8
Cash conversion cycle is -97.28% below industry average
The remaining useful life of property plant & equipment is: 5.1 years
Stock based compensation to net income ratio:
1.37%
In-depth Efficiency Analysis
Revenue generated per employee:
1.7M
Each employee generates 20% more revenue than industry average revenue per employee
EBITDA generated per employee:
92.0K
Each employee generates 40% more EBITDA than industry average revenue per employee
Profit generated per employee:
61.2K
Each employee generates 51% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 10.6K
Each employee generates -16% less free cash flow than industry average revenue per employee
Assets/Capital per employee
172.5K
Each employee generates -16% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
ARW
Globant SA (XNYS:GLOB)
WEX INC. (XNYS:WEX)
DXC TECHNOLOGY COMPANY (XNYS:DXC)
JUNIPER NETWORKS, INC. (XNYS:JNPR)
CIENA CORPORATION (XNYS:CIEN)
GUIDEWIRE SOFTWARE, INC. (XNYS:GWRE)
Lightspeed Commerce Inc. (XNYS:LSPD)
JABIL INC. (XNYS:JBL)
Iprochim SA (XBSE:IPHI)
Current Analyst Ratings
Strong buy�13%
Buy�4%
Hold�17%
Sell�0%
Strong sell�4%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/2/22
Revenue:
35.17B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
30.69B
4.48B
-
1.88B
2.51B
-
147.59M
2.65B
4.51M
67.13M
193.09M
1.90B
1.77B
1.27B
1.65B
377.24M
1.27B
Statement of Cash Flow
Date:
Period:
48.31M
Differed Income Tax :
1.35M
Stock Based Compensation :
17.35M
Change in Working Capital :
- 631084.00K
Accounts Receivables:
430.71M
Other Working Capital:
- 79426.00K
Other Non-Cash Items:
- 2168.00K
Net Cash Provided by Operating Activities:
- 200248.00K
Investments in PP&E:
- 19270.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/2/22
2022
Q1
242.79M
-
242.79M
10.62B
4.65B
431.64M
15.94B
658.20M
2.07B
185.75M
65.24M
-
594.93M
3.57B
-
19.51B
9.11B
317.40M
-
-
1.24B
10.67B
2.79B
621.51M
3.41B
-
14.08B
125.42M
8.15B
- 232969.0K
-
April 2, 2022 at 6:00:00 AM
33.34B
5.37B
19.45B
-
3.11B
2.9B
-
20.17M
899.00K
- 350000.00K
-
- 264431.00K
-
842.01M
227.58M
- 7632.00K
20.60M
242.79M
222.19M
- 200248.00K
- 19270.00K
- 219518.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
ARW
2023
2024
2025
2026
2027
$112.87
$213.59
$233.57
$255.42
$279.32