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Despite this outperformance, AVT stock is trading at a price-to-sales multiple of 0.23X, which is below the P/S multiple of industry’s P/S multiple of 0.37X. The undervaluation is further substantiated by a Zacks Value Score of B.
AVT Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
The stock’s dynamics raise a question: Does it still have room to run, or is it time for investors to consider taking profits? Let’s find out.
Avnet’s Broad Portfolio Supports its Growth
Avnet’s product portfolio includes semiconductors, IP&E components, embedded offerings and supply-chain services, allowing it to support industrial, transportation, data center and other applications. Its customers are spread across 140 nations, with a major portion being original equipment manufacturers. Avnet further supports customers with engineering resources, digital capabilities, integrated solutions and physical supply-chain infrastructure.
Avnet’s focus on IP&E, embedded solutions and supply-chain services remains a key source of mix improvement. In the fourth quarter of fiscal 2026, IP&E posted record sales, while full-year IP&E revenues approached $5 billion. Management is expanding supply-chain engagements with large OEMs in data center infrastructure, networking and transportation. Furthermore, Farnell’s multi-quarter recovery is providing greater earnings leverage as demand returns.
In the fourth quarter of fiscal 2026, Farnell’s sales rose 29% year over year and 10% sequentially, while operating margin reached 9%, up from 5.2% in the third quarter and 4.3% a year earlier. That marked the seventh consecutive quarter of operating margin expansion and the highest level in more than three years. AVT expects double-digit growth in fiscal 2027. Avnet is also working on Farnell’s margin profile through the cycle and expects the normalized level. The Zacks Consensus Estimate for AVT’s fiscal 2027 margin suggests year-over-year growth of 84.3%. Estimates have remained unchanged in the past 30 days.
Image Source: Zacks Investment Research
Avnet Wins Against its Competitors Through Differentiation
Although Avnet operates in a competitive technology distribution market, this hasn’t stopped Avnet from increasing its top- and bottom-line growth. AVT competes with global component distributors as well as broader IT distributors, including Arrow Electronics (ARW - Free Report) , TD SYNNEX (SNX - Free Report) and CDW (CDW - Free Report) . However, the company has created a niche for itself, which helps protect its margins.
Arrow Electronics competes head-to-head with Avnet in electronic component distribution, semiconductor supply, embedded computing and engineering services. Both Arrow Electronics and Avnet serve OEMs, industrial manufacturers, automotive suppliers, communications equipment vendors and data center customers. Avnet comes to a crossroads with CDW and TD SYNNEX as they form part of the AI infrastructure value chain. Avnet plays its role much earlier in the technology value chain by supplying electronic components directly to equipment manufacturers, making the overlap minimal with CDW and TD SYNNEX.
Furthermore, AVT gains from broader demand growth across industrial, networking, aerospace and defense. In the fourth quarter of fiscal 2026, all end markets increased in double digits both year over year and sequentially, while book-to-bill remained well above parity in every region and lead times rose across most product categories. Avnet guided first-quarter fiscal 2027 sales to $9-$9.3 billion, implying about 10% sequential growth.
Avnet is supporting higher sales while increasing the velocity of inventory and working capital. In the fourth quarter of fiscal 2026, inventory days fell to 71 from 77 in the third quarter, while working capital days declined to 69 from 76. EC inventory days moved below 65, and return on working capital reached 19%, above management’s 16% near-term target. These factors are likely to help AVT grow in fiscal 2027.
Conclusion: Buy AVT Stock Now
Avnet remains a compelling buy, supported by accelerating AI infrastructure demand, strong growth in networking and IP&E products, expanding margins and an improving earnings outlook. Despite its sharp rally, the stock continues to trade at a valuation below the industry average, offering attractive upside as AI-driven component demand and industrial spending remain robust. AVT sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
View the Zacks #1 Rank List
Image: Bigstock
AVT Surges 88.5% in a Year: Should You Buy, Sell or Hold the Stock?
Key Takeaways
Avnet (AVT - Free Report) shares have jumped 88.5% in the past year, outperforming the Zacks Electronics - Parts Distribution industry and the Zacks Computer and Technology sector’s return of 80.1% and 27.8%, respectively.
AVT One-Year Performance Chart
Image Source: Zacks Investment Research
Despite this outperformance, AVT stock is trading at a price-to-sales multiple of 0.23X, which is below the P/S multiple of industry’s P/S multiple of 0.37X. The undervaluation is further substantiated by a Zacks Value Score of B.
AVT Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
The stock’s dynamics raise a question: Does it still have room to run, or is it time for investors to consider taking profits? Let’s find out.
Avnet’s Broad Portfolio Supports its Growth
Avnet’s product portfolio includes semiconductors, IP&E components, embedded offerings and supply-chain services, allowing it to support industrial, transportation, data center and other applications. Its customers are spread across 140 nations, with a major portion being original equipment manufacturers. Avnet further supports customers with engineering resources, digital capabilities, integrated solutions and physical supply-chain infrastructure.
Avnet’s focus on IP&E, embedded solutions and supply-chain services remains a key source of mix improvement. In the fourth quarter of fiscal 2026, IP&E posted record sales, while full-year IP&E revenues approached $5 billion. Management is expanding supply-chain engagements with large OEMs in data center infrastructure, networking and transportation. Furthermore, Farnell’s multi-quarter recovery is providing greater earnings leverage as demand returns.
In the fourth quarter of fiscal 2026, Farnell’s sales rose 29% year over year and 10% sequentially, while operating margin reached 9%, up from 5.2% in the third quarter and 4.3% a year earlier. That marked the seventh consecutive quarter of operating margin expansion and the highest level in more than three years. AVT expects double-digit growth in fiscal 2027. Avnet is also working on Farnell’s margin profile through the cycle and expects the normalized level. The Zacks Consensus Estimate for AVT’s fiscal 2027 margin suggests year-over-year growth of 84.3%. Estimates have remained unchanged in the past 30 days.
Image Source: Zacks Investment Research
Avnet Wins Against its Competitors Through Differentiation
Although Avnet operates in a competitive technology distribution market, this hasn’t stopped Avnet from increasing its top- and bottom-line growth. AVT competes with global component distributors as well as broader IT distributors, including Arrow Electronics (ARW - Free Report) , TD SYNNEX (SNX - Free Report) and CDW (CDW - Free Report) . However, the company has created a niche for itself, which helps protect its margins.
Arrow Electronics competes head-to-head with Avnet in electronic component distribution, semiconductor supply, embedded computing and engineering services. Both Arrow Electronics and Avnet serve OEMs, industrial manufacturers, automotive suppliers, communications equipment vendors and data center customers. Avnet comes to a crossroads with CDW and TD SYNNEX as they form part of the AI infrastructure value chain. Avnet plays its role much earlier in the technology value chain by supplying electronic components directly to equipment manufacturers, making the overlap minimal with CDW and TD SYNNEX.
Furthermore, AVT gains from broader demand growth across industrial, networking, aerospace and defense. In the fourth quarter of fiscal 2026, all end markets increased in double digits both year over year and sequentially, while book-to-bill remained well above parity in every region and lead times rose across most product categories. Avnet guided first-quarter fiscal 2027 sales to $9-$9.3 billion, implying about 10% sequential growth.
Avnet is supporting higher sales while increasing the velocity of inventory and working capital. In the fourth quarter of fiscal 2026, inventory days fell to 71 from 77 in the third quarter, while working capital days declined to 69 from 76. EC inventory days moved below 65, and return on working capital reached 19%, above management’s 16% near-term target. These factors are likely to help AVT grow in fiscal 2027.
Conclusion: Buy AVT Stock Now
Avnet remains a compelling buy, supported by accelerating AI infrastructure demand, strong growth in networking and IP&E products, expanding margins and an improving earnings outlook. Despite its sharp rally, the stock continues to trade at a valuation below the industry average, offering attractive upside as AI-driven component demand and industrial spending remain robust. AVT sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.