Arrow Electronics

ARW

Technology Distributors · Technology

Price

$206.61

+2.51 (+1.23%)

Market Cap

$10.56B

Winston Score

Winston is serious

Mixed quality — meaningful strengths and weaknesses.

Share count falling — buybacks

−28.8% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 73.4M (2021) → 52.3M (2025)

Arrow Electronics is a middleman between companies that make electronic parts and the businesses that need those parts to build products. It sells components like chips, sensors, and circuit boards to manufacturers in industries such as aerospace, healthcare, automotive, and industrial equipment. Arrow is one of the two largest electronics distributors in the world, alongside Avnet.

Arrow makes money by buying parts in bulk from suppliers and reselling them at a markup to thousands of customers globally. It operates in over 50 countries, generating roughly $30 billion in annual revenue, which makes it a large but thin-margin business — it keeps only about 11 cents of gross profit for every dollar of sales. Its main competitive advantage is its massive supplier relationships and logistics network, but the biggest risk it faces is that demand for electronics components is highly cyclical, meaning sales can drop sharply when the broader economy slows down.

Winston Score History

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+39.0% YoY

YoY Growth Rate

Revenue accelerating

EPS Growth

+199.3% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$0/ year

0.0% of revenue

Below sector average (15%)

Research and development spending

Insider Activity

0.6%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$287M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Revenue accelerating

Arrow Electronics grew revenue 39% year-over-year and the growth rate is speeding up. That's the kind of momentum growth investors look for — the question is whether margins can follow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

11.1%

Thin — 11.1% gross margin

Operating Margin

4.2%

Thin — 4.2% operating margin

ROCE

4.3%

Weak — 4.3% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+20.5%

Fast-growing sales (20.5% YoY)

EPS YoY

+92.0%

Earnings growing fast (92.0% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Cash Conversion

57%

Weak — only 57% of profit becomes cash

FCF Margin

0.9%

Thin free cash flow (0.9%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

0.37

Conservative — low debt load (0.37)

Interest Cover

9.07x

Comfortably covers interest (9.1x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

14.7x

Attractive valuation — P/E 14.7

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward

+4.8

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (14.7 → 9.9)

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Dividends

Not applicable for this business.

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