---
title: "Arrow Electronics is the cheapest of the four big US distributors after its operating income roughly doubled"
description: "Arrow Electronics is the cheapest of the big US technology distributors on trailing earnings even as its operating income runs at roughly double its year-ago level. The gap is a price on the Dell loss and a chief-executive seat held interim for over a year, and the October 29 report plus a permanent-chief decision will test it."
publisher: "The Inference"
section: "Markets"
published: 2026-10-20T14:58:58.568Z
modified: 2026-10-20T14:58:58.568Z
canonical: https://theinference.org/article/arrow-electronics-is-the-cheapest-of-the-four-big-us-distributors-after-its-operating-income-roughly-doubled
language: en
keywords: "Arrow Electronics, Valuation, Earnings, Semiconductors, Distribution"
---

# Arrow Electronics is the cheapest of the four big US distributors after its operating income roughly doubled

> Arrow Electronics is the cheapest of the big US technology distributors on trailing earnings even as its operating income runs at roughly double its year-ago level. The gap is a price on the Dell loss and a chief-executive seat held interim for over a year, and the October 29 report plus a permanent-chief decision will test it.

[Arrow Electronics](https://theinference.org/markets/companies/arrow-electronics), the distributor that moves roughly $10 billion of chips, sensors and enterprise hardware a quarter, trades at the lowest earnings multiple of the four big US technology distributors [1][2]. The discount tracks the half of the company that lost Dell this year and has worked under an interim chief executive since September 2025; operating income group-wide, most of it components, ran at roughly double its year-ago level last quarter [2][6]. Two events will test the price: the October 29 report and the board's choice of a permanent chief [3][6].

*Chart: **Arrow carries the lowest earnings multiple of the four big US technology distributors** Bar chart of trailing price-to-earnings ratios for Arrow Electronics, TD Synnex, Avnet and WESCO in mid-October 2026, with Arrow lowest at 13.71 times.*

*Trailing price-to-earnings from market snapshots on October 15 and 16, 2026 (Arrow, Avnet and WESCO at the October 16 close; TD Synnex at October 15). Sources: ad-hoc-news, StockAnalysis and MarketBeat data. [1][3]*

## The components half is already printing the recovery

[Avnet](https://theinference.org/markets/companies/avnet), Arrow's closest peer in component distribution, [closed its fiscal fourth quarter with record sales and adjusted operating income up 122 percent](https://finance.yahoo.com/markets/stocks/articles/avnet-balance-margin-stability-amid-132400642.html), margins expanding for a fourth straight quarter [4]. Book-to-bill, orders measured against shipments, ran above parity in every region [4]. Arrow's own filings show the same mechanism arriving one peer over: quarterly operating income has climbed for three straight quarters and now sits at roughly double its year-ago level, on a gross margin that has barely moved in two years [2]. That is volume flowing through a fixed cost base, and it came with a quarter that beat consensus and [components book-to-bill above parity on demand from AI infrastructure, aerospace and defense](https://xaipart.com/blog/arrow-electronics-earnings-beat-signals-firmer-book-to-bill-for-ai-and-aerospace-component-lines) [5].

*Chart: **Arrow's quarterly operating income has climbed for three straight quarters** Line chart of Arrow Electronics quarterly operating income from Q3 2024 to Q2 2026, rising from $0.18 billion to $0.38 billion with the climb starting in Q4 2025.*

*Operating income per quarter, USD billions, from Arrow's SEC filings. The two most recent quarters sit near double the year-ago levels of $0.19B and $0.18B. Source: Arrow Electronics quarterly figures from its SEC filings (via company_series). [2]*

*Chart: **All of the recovery shows up below the gross line** Line chart of Arrow Electronics gross margin holding near 11 percent across eight quarters while operating margin climbs from 2.3 to 3.8 percent.*

*Gross and operating margin as a percent of revenue, per quarter, from Arrow's SEC filings. Gross margin has stayed within a 0.7 point band for two years while operating margin has risen about 1.2 points. Source: Arrow Electronics quarterly figures from its SEC filings (via company_series). [2]*

## The discount lives in the half that lost Dell

Arrow's enterprise computing unit, ECS, lost Dell's North American distribution business this year after a formal review [6][8]. [Raymond James](https://theinference.org/markets/companies/raymond-james-financial) kept its Outperform rating and [called the earnings effect likely immaterial](https://finance.yahoo.com/markets/stocks/articles/raymond-james-says-dell-technologies-185055343.html), because the deal's reported $1.4 billion value was gross billings rather than revenue [8]. Succession runs deeper. [Eric Nowak](https://theinference.org/markets/people/eric-nowak), a 22-year Arrow veteran who runs the unit, [steps down on December 31](https://www.streetinsider.com/dr/news.php?id=27193449), and [Rodney Clark](https://theinference.org/markets/people/rodney-clark), who ran [Cisco](https://theinference.org/markets/companies/cisco)'s global partner sales and was [Microsoft](https://theinference.org/markets/companies/microsoft)'s channel chief, [starts on November 9](https://www.crn.com/news/channel-news/2026/arrow-ecs-veteran-eric-nowak-to-retire-ex-cisco-microsoft-exec-rodney-clark-to-take-ecs-lead) [6][7]. Above both, Bill Austen has held the chief-executive seat on an interim basis since Sean Kerins stepped down [6].

## October 29 and one appointment settle the fork

Arrow reports on October 29 [3]. If components margin follows Avnet's expansion, the discount was a leadership discount and a permanent chief closes most of it; if gross margin stays flat while growth cools, the cheap multiple was honest. [Six analysts sit in the middle at a $233.25 average target](https://www.ad-hoc-news.de/boerse/news/nebenwerte/six-analysts-put-arrow-electronics-stock-at-usd-233-25-8-36-percent-above-price/70331114) [3]. On the evidence filed so far, the recovery is already in the numbers, and the vacancies are in the price.

## Takeaway

Arrow's operating income has roughly doubled year over year and its components book-to-bill runs above parity, yet it trades at 13.71 times trailing earnings, the lowest of the four big US distributors. The discount prices the Dell loss, the ECS succession and an interim chief executive; the October 29 report and the permanent-chief pick decide whether it closes.

## Sources

1. [ad-hoc-news.de, Arrow Electronics stock traded at 13.71 times earnings, 18 October 2026](https://www.ad-hoc-news.de/boerse/news/nebenwerte/arrow-electronics-stock-traded-at-13-71-times-earnings/70350610)
2. [Arrow Electronics quarterly figures from its SEC filings (via company_series), retrieved 20 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000007536)
3. [ad-hoc-news.de, Six analysts put Arrow Electronics stock at USD 233.25, 8.36 percent above price, 16 October 2026](https://www.ad-hoc-news.de/boerse/news/nebenwerte/six-analysts-put-arrow-electronics-stock-at-usd-233-25-8-36-percent-above-price/70331114)
4. [Zacks via Yahoo Finance, Can Avnet Balance Margin Stability Amid AI Infrastructure Expansion?, 14 October 2026](https://finance.yahoo.com/markets/stocks/articles/avnet-balance-margin-stability-amid-132400642.html)
5. [XAIPART (reporting Kalkine Media), Arrow Electronics earnings beat signals firmer book-to-bill for AI and aerospace component lines, 13 October 2026](https://xaipart.com/blog/arrow-electronics-earnings-beat-signals-firmer-book-to-bill-for-ai-and-aerospace-component-lines)
6. [CRN, Arrow ECS Veteran Eric Nowak To Retire, Ex-Cisco, Microsoft Exec Rodney Clark To Take ECS Lead, October 2026](https://www.crn.com/news/channel-news/2026/arrow-ecs-veteran-eric-nowak-to-retire-ex-cisco-microsoft-exec-rodney-clark-to-take-ecs-lead)
7. [StreetInsider, Form 8-K, Arrow Electronics, Inc., for 12 October 2026, filed 15 October 2026](https://www.streetinsider.com/dr/news.php?id=27193449)
8. [Insider Monkey via Yahoo Finance, Raymond James says Dell Technologies termination earnings effect on Arrow 'likely immaterial', 8 July 2026](https://finance.yahoo.com/markets/stocks/articles/raymond-james-says-dell-technologies-185055343.html)


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Arrow Electronics is the cheapest of the four big US distributors after its operating income roughly doubled — The Inference. Canonical: https://theinference.org/article/arrow-electronics-is-the-cheapest-of-the-four-big-us-distributors-after-its-operating-income-roughly-doubled