Arrow Electronics Inc. (ARW - Free Report) appears to be a solid bet right now because of its sound growth strategies, which are driving its top and bottom lines. In the most recently reported first-quarter 2018 results, the company’s revenues of $6.876 billion on a reported basis increased 19.9% year over year.
Moreover, non-GAAP earnings increased 28.8% year over year to $1.88 per share. Notably, the company surpassed the Zacks Consensus Estimate in three of the last four quarters while coming in line on the remaining one occasion. The average positive earnings surprise for the trailing four quarters is 3.25%.
Notably, since the release of first-quarter earnings, the company’s stock has gained 5.6%, outperforming the industry’s rally of 5.4% during the same time frame.
Driving Factors in Detail
Arrow Electronics, one of the world’s largest distributors of electronic components and enterprise computing products, is gaining from its core strength in providing best-in-class services and easy-to-acquire technologies.
Additionally, a broad portfolio of products and services and continued efforts to maximize consumer satisfaction aided the company in securing a significant market share. There is huge scope for the company to earn additional revenues through the enhancement of the cloud-related portal. We believe its expertise in understanding market dynamics and strong product portfolio will continue to support growth.
Moreover, incremental sales from strategic acquisitions and partnerships are expected to add to revenues as well. Acquisitions are likely to enable Arrow to enter markets, diversify and broaden its product portfolio and maintain its leading position. We believe that the company’s continued acquisitions are expected to be a significant contributor to its revenue stream.
Furthermore, spending on electronic components and computer products is highly dependent on overall IT spending. The research firm expects worldwide IT spending to reach $3.74 trillion in 2018, representing a 6.2% increase from $3.52 billion recorded last year. All this encourages us about the company’s near-term prospects
We believe that all the positives mentioned above justify this Zacks Rank #2 (Buy) stock’s position in investor’s portfolio.
Other Key Picks
Some other top-ranked stocks in the broader technology sector include Twitter, Inc. (TWTR - Free Report) , NVIDIA Corp. (NVDA - Free Report) and Western Digital Corp. (WDC - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term EPS growth rate for Twitter, NVIDIA and Western Digital is projected to be 23.1%, 10.4% and 19%, respectively.
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