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

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Arrow Electronics (ARW - Free Report) closed at $123.24 in the latest trading session, marking a +0.06% move from the prior day. The stock lagged the S&P 500's daily gain of 1.23%. Elsewhere, the Dow gained 0.97%, while the tech-heavy Nasdaq added 0.44%.

Prior to today's trading, shares of the electronics maker had gained 1.05% over the past month. This has lagged the Computer and Technology sector's gain of 3.63% and the S&P 500's gain of 4.69% in that time.

Wall Street will be looking for positivity from Arrow Electronics as it approaches its next earnings report date. The company is expected to report EPS of $4.53, up 59.51% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $8.67 billion, up 3.37% from the prior-year quarter.

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 should also note any recent changes to analyst estimates for Arrow Electronics. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Arrow Electronics is currently sporting a Zacks Rank of #1 (Strong Buy).

Digging into valuation, Arrow Electronics currently has a Forward P/E ratio of 6.67. For comparison, its industry has an average Forward P/E of 7.44, which means Arrow Electronics is trading at a discount to the group.

Investors should also note that ARW has a PEG ratio of 2.13 right now. 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 1.14 as of yesterday's close.

The Electronics - Parts Distribution industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 8, which puts it in the top 4% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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