Arrow Electronics beat expectations on its last four earnings reports
Semiconductor names like Arrow Electronics, Inc. (NYSE:ARW) are having a stellar summer. ARW is up 22.7% in 2021 ahead of the company's second-quarter earnings report, set for tomorrow before the open.
So far, ARW has outperformed earnings expectations on all four of its most recent earnings reports. However, that has resulted in post-earnings moves of only roughly 1.2%. For tomorrow's report, the options market is pricing in a larger-than-usual post-earnings of 4.2%.
Arrow Electronics stock took a breather after its May 25 record high of $124.76, but the pullback was contained by its 160-day moving average. A positive post-earnings reaction could sway analyst too, considering all three maintain a tepid "hold" rating.
Arrow Electronics stock currently trades at a low price-earnings ratio of 12.52 and has an even better forward price-earnings ratio of 10.78. However, Arrow Electronics has struggled to find consistency on its top- and bottom-line growth, experiencing back-to-back years of revenue declines in fiscal 2019 and fiscal 2020, as well as a massive drop in net income for fiscal 2019. Arrow Electronics also has a shaky balance sheet with $2.27 billion in total debt and only $227.7 million in cash. Overall, Arrow Electronics stocks isn’t the most fundamentally sound stock, but ahead of earnings the stock does offer a very attractive valuation which best suits investors with a high risk tolerance.