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Arrow Electronics (ARW) Gains But Lags Market: What You Should Know

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In the latest trading session, Arrow Electronics (ARW - Free Report) closed at $125.97, marking a +1.16% move from the previous day. This move lagged the S&P 500's daily gain of 1.43%. Meanwhile, the Dow gained 1.02%, and the Nasdaq, a tech-heavy index, added 0.32%.

Coming into today, shares of the electronics maker had gained 3.58% in the past month. In that same time, the Computer and Technology sector gained 5.48%, while the S&P 500 gained 5.65%.

Investors will be hoping for strength from Arrow Electronics as it approaches its next earnings release. The company is expected to report EPS of $4.53, up 59.51% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $8.67 billion, up 3.37% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $18.48 per share and revenue of $35.31 billion. These totals would mark changes of +19.23% and +2.42%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Arrow Electronics. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Arrow Electronics currently has a Zacks Rank of #1 (Strong Buy).

In terms of valuation, Arrow Electronics is currently trading at a Forward P/E ratio of 6.74. This valuation marks a discount compared to its industry's average Forward P/E of 7.39.

It is also worth noting that ARW currently has a PEG ratio of 2.15. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. ARW's industry had an average PEG ratio of 1.12 as of yesterday's close.

The Electronics - Parts Distribution industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 4, putting it in the top 2% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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