At first, the low price to book and low forward PE make the stop look inexpensive.
The consensus analyst estimates of $8.97 EPS is too high in our view; our model whows $5-$6 per share as much more realistic.
COGS (cost of goods sold) has risen slightly faster than revenue over the past three years; this shows ARW's lack of pricing power and lack of ability to increase margins.
Editor's note: This article has been updated from an earlier version to clarify statements about analyst estimates, one-time expenses, and debt issuance.
We believe that Arrow Electronics (ARW) valuation is high