ARWArrow Electronics Inc.

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Company Info

CEO

Sean J. Kerins

Location

Colorado, USA

Exchange

NYSE

Website

https://arrow.com

Summary

Arrow Electronics, Inc.

Company Info

CEO

Sean J. Kerins

Location

Colorado, USA

Exchange

NYSE

Website

https://arrow.com

Summary

Arrow Electronics, Inc.

AI Insights for ARW
2 min read

Quick Summary

Arrow Electronics Inc. is a major global provider of products, services, and solutions for industrial and commercial users of electronic components and enterprise computing solutions. Serving a wide range of customers including original equipment manufacturers (OEMs), value-added resellers, and commercial enterprises, the company operates through its Global Components and Global Enterprise Computing Solutions segments. Arrow supplies semiconductors, passive, electromechanical, and interconnect components, as well as computing and memory products. The company also offers a diverse suite of technology integration, logistics, and engineering support services. With sales reaching nearly $28 billion in 2024, Arrow is an established player within the technology distribution and supply chain sector, addressing the needs of both the electronics manufacturing and computing industries.

The Bull Case

  • Arrow Electronics benefits from a broad and diversified product portfolio, significant scale, and entrenched relationships with both suppliers and customers globally.
  • Its presence in both electronic components and enterprise computing solutions allows cross-segment leveraging and revenue stability.
  • The company’s ongoing focus on higher-margin and recurring revenue streams, as evidenced by recent partnerships in automation and software, positions it well to grow beyond traditional distribution.
  • Strong inventory and cash flow management help Arrow weather tough market conditions.
  • Its willingness to innovate through blockchain and AI-enhanced supply chain solutions demonstrates adaptability within a rapidly changing industry.

The Bear Case

  • Arrow is currently experiencing declining overall revenues and earnings, with macroeconomic uncertainty and competitive pressure weighing on top-line growth.
  • Its core components distribution business faces disruption risks from automation and digital platforms, which may reduce the relevance of traditional intermediaries.
  • Margins have been under pressure due to strategic outsourcing and competition, while guidance misses have contributed to lukewarm investor sentiment.
  • The company has a relatively low price-to-book value, reflecting concerns over long-term growth and profitability.
  • Execution risks also remain around its transition to higher-margin, recurring business models.

Key Risks

  • Arrow faces notable risks from the ongoing digitalization of the supply chain, with customers increasingly adopting direct sourcing and online procurement platforms, potentially bypassing traditional distributors.
  • Intense competition from global and niche distributors can erode margins and limit pricing power.
  • Macroeconomic volatility, including supply chain disruptions and changing end-market demand, could hamper revenue recovery.
  • The company remains exposed to technology cycles and strategic execution risk as it pivots toward recurring revenue and automation.

What to Watch

UpcomingIn the most recent quarter, Arrow Electronics beat revenue and EPS estimates with year-over-year sales growth driven primarily by strong demand in Asia and higher performance in value-added services.
UpcomingThe company improved its inventory turns and maintained operating margins despite pressure on gross margins, and completed $50 million in share repurchases.
UpcomingThere were also strategic partnerships announced, such as collaborations with InOrbit.AI for robotics automation and with NXP Semiconductors and eInfochips to support automotive microcontroller software.
ExpectedFor the upcoming quarter, Arrow Electronics has guided for lower sales in the range of $6.0–6.6 billion and EPS of $0.98–$1.18, reflecting ongoing market normalization and persistent macroeconomic headwinds.

Price Drivers

  • The primary factors driving Arrow Electronics' stock price include its quarterly earnings performance, guidance updates, and macroeconomic trends impacting the technology supply chain.
  • Strong fiscal quarters, where revenue and EPS outperform guidance or market expectations, typically support stock appreciation.
  • Additionally, major partnerships and strategic initiatives such as moves into automation, cloud services, or recurring revenue streams can drive investor optimism.
  • Broader industry tendencies, such as normalization of inventory and global supply chain dynamics, also influence market sentiment.

Recent News

  • Recent news highlights several key developments for Arrow Electronics.
  • The company beat revenue and EPS expectations in Q3 and Q2 2025, but provided cautious guidance for the upcoming quarters, reflecting a challenging macroeconomic landscape.
  • Arrow announced strategic partnerships with InOrbit.AI for robotics automation and with NXP Semiconductors and eInfochips for automotive software, underlining its push into higher-margin service areas.
  • Arrow also became part of the Hedera Council to explore blockchain-based supply chain innovation and completed share repurchases totaling hundreds of millions of dollars in 2024.

Market Trends

  • The technology distribution sector is undergoing rapid transformation as digitalization, automation, and cloud adoption reshape how customers source and integrate components and systems.
  • Supply chain normalization and post-pandemic inventory adjustments are impacting order flows and revenue recognition for distributors like Arrow.
  • Market competition is intensifying with both legacy and digital-first players vying for share.
  • Demand for automation, edge computing, and automotive electronics is growing, offering new avenues for growth.

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Topics: Company overview • Products • Competitors • Strengths & Risks

Symbol's posts

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@raven 1 year ago

Momentum Investing

Momentum Investing

The upside of short-term investments is that you have access to your money when you need it. Those investing on a short-term basis are often doing so because they need to have the money at a certain time. For instance, if you have a down payment on a house or a loan to pay off, the money should be ready at the go. As a rule of thumb, any investment for less than three years is considered a short-term investment. 

Risky But More Yield

Short-term investments can be profitable at the cost of more risk and can go sideways if not done carefully. Some of you might have heard of the term ‘Momentum Investing’. It’s a strategy used by short-term investors which in theory is based on Newton's Third Law of Motion, that is momentum is conserved. If something is moving, it will continue to move at the same speed unless another force acts on it. 

Quite similar to this law, short-term investors aim to benefit from stocks that have built momentum in the market and are going up and will keep going up. At this point, I know what you might be asking next. How to design a good exit strategy for short-term investments? For this task, I’m going to use price and fundamental momentum combined with the quality of the stocks. 

I typically shortlist stocks that have shown 3-month gains and one-year declines above 10%. All these companies have market capitalization of more than 2 billion USD to ensure they are firmly established. The next move is to secure competitive yields that often move closely in tune with federal funds rate. Here are some additional factors I consider:

  • Return on Equity > 15

  • Debt to Equity Ratio is less than 5 

  • 1-year revenue growth > 10%

  • 1-year EPS growth > 10%

Here are some picks that fit that criterion, , , , ,  

Note that these are not recommendations. I’m merely offering my take on the subject matter. 

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