Investment Thesis
Arrow Electronics shows strong revenue growth and improved EPS, but fundamentals are concerning with negative free cash flow, razor-thin net margins (1.9%), and an unusual 14,443% YoY revenue increase that suggests data anomaly or significant one-time event requiring clarification. The company's capital intensity (CapEx exceeds operating cash flow) and weak profitability metrics indicate operational challenges despite top-line expansion.
ARW Strengths
- Substantial revenue growth of 14,443% YoY indicates significant market expansion or transformative business event
- EPS improved 49.9% YoY to $10.93, showing earnings leverage
- Moderate leverage with Debt/Equity of 0.47x provides financial flexibility
- Adequate liquidity with Current Ratio of 1.36x and $306.5M cash position
ARW Risks
- Negative free cash flow of -$37.2M despite $64M operating cash flow indicates CapEx ($101.3M) exceeds internal generation capacity
- Extremely thin net margin of 1.9% and operating margin of 2.7% provide minimal earnings buffer for adverse conditions
- The 14,443% revenue spike is highly irregular and likely data anomaly or one-time event; actual normalized revenue trends unclear
- Gross margin of only 11.2% suggests low pricing power or high procurement costs typical of distribution businesses
- ROE of 8.7% and ROA of 2.0% are below acceptable thresholds for capital-intensive wholesale distribution
Key Metrics to Watch
- Normalized revenue growth excluding one-time events or accounting adjustments
- Free cash flow conversion and capital expenditure trends
- Operating and net margin trajectory and sustainability
- Debt reduction progress and interest coverage ratio trends
ARW Financial Metrics
ARW Profitability Ratios
ARW Balance Sheet & Liquidity
ARW 5-Year Financial Trend
5-Year Trend Summary: ARROW ELECTRONICS, INC.'s revenue has remained relatively flat over the 5-year period, with a 4% decline. The most recent EPS of $15.84 reflects profitable operations.
ARW Growth Metrics (YoY)
ARW Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $6.8B | $100.6M | $1.88 |
| Q2 2025 | $6.9B | $108.7M | $2.01 |
| Q1 2025 | $6.8B | $79.7M | $1.51 |
| Q3 2024 | $6.8B | $100.6M | $1.88 |
| Q2 2024 | $6.9B | $108.7M | $2.01 |
| Q1 2024 | $6.9B | $83.6M | $1.53 |
| Q3 2023 | $8.0B | $198.7M | $3.53 |
| Q2 2023 | $8.5B | $236.6M | $4.12 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
ARW Capital Allocation
ARW SEC Filings
Access official SEC EDGAR filings for ARROW ELECTRONICS, INC. (CIK: 0000007536)