Arrow Electronics Stock Up 15.1% to $145.87, Hold Rated on Growth Concerns
Arrow Electronics’s shares have risen 15.1% to $145.87 after outpacing the S&P 500 by 9.4% over six months, bolstered by solid Q4 earnings. However, its 1.5% five-year revenue CAGR, 7.1% EPS CAGR and declining ROIC have prompted analysts to rate the stock as a hold.
1. Six-Month Outperformance and Q4 Results
Over the past six months, Arrow Electronics stock has surged 15.1% to $145.87, outperforming the S&P 500 by 9.4%, powered by solid Q4 revenue and margin performance. Strong demand across distribution and services divisions underpinned the quarterly beat and investor optimism.
2. Weak Long-Term Revenue vs EPS Growth
Arrow Electronics’s revenue expanded at just a 1.5% compounded annual rate over the last five years, lagging industry benchmarks for sustainable growth. In contrast, earnings per share rose at a 7.1% CAGR during the same period, reflecting improved profitability but limited top-line momentum.
3. Declining ROIC and Valuation Assessment
Return on invested capital has declined significantly in recent years, indicating fewer high-return opportunities. Trading at 11.4× forward earnings, the stock’s reasonable valuation and muted growth prospects have led analysts to adopt a hold stance.