A strong stock as of late has been Arrow Electronics (ARW). Shares have been marching higher, with the stock up 29.6% over the past month. The stock hit a new 52-week high of $162.61 in the previous session. Arrow Electronics has gained 42.4% since the start of the year compared to the -1.2% move for the Zacks Computer and Technology sector and the 29.9% return for the Zacks Electronics - Parts Distribution industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on February 5, 2026, Arrow Electronics reported EPS of $4.39 versus consensus estimate of $3.55 while it beat the consensus revenue estimate by 7.97%.
For the current fiscal year, Arrow Electronics is expected to post earnings of $13.08 per share on $32.93 in revenues. This represents a 18.69% change in EPS on a 6.73% change in revenues. For the next fiscal year, the company is expected to earn $14.43 per share on $34.03 in revenues. This represents a year-over-year change of 10.28% and 3.33%, respectively.
Valuation Metrics
Though Arrow Electronics has recently hit a 52-week high, what is next for Arrow Electronics? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Arrow Electronics has a Value Score of B. The stock's Growth and Momentum Scores are C and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 12X current fiscal year EPS estimates, which is not in-line with the peer industry average of 16.8X. On a trailing cash flow basis, the stock currently trades at 10.9X versus its peer group's average of 15.1X. Additionally, the stock has a PEG ratio of 0.79. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this is even more important than the company's VGM Score. Fortunately, Arrow Electronics currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Arrow Electronics passes the test. Thus, it seems as though Arrow Electronics shares could have potential in the weeks and months to come.
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Arrow Electronics, Inc. (ARW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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