Arrow (ARW) Expands RF Connectivity Offering With Sunway Deal

Arrow Electronics ARW recently announced that it has entered into an agreement with Sunway Communication. Sunway is a world-leading provider of radio frequency connectivity-related and other performance-critical components and modules.

As part of the distribution agreement, Arrow will offer and support Sunway’s entire product range across the Americas, Europe, the Middle East and Africa. Initially, the NY-based electronic component distributor will be offering Sunway’s Ultra-Wideband (“UWB”) solutions, which include modules and development kits based on NXP Semiconductors’ NXPI Trimension UWB portfolio.

NXP Semiconductors’ UWB portfolio aids in developing applications, including device tracking, real-time locating systems and access control for consumer and industrial settings. The devices use Time-of-Flight and Angle-of-Arrival measurements to determine relative positions in three dimensions with a high degree of accuracy.

Arrow’s substantial engineering and sales infrastructure will aid Sunway Communication in expanding both its standard and customized product portfolios while supporting new client bases to adapt to faster wireless connectivity.

 

Arrow Electronics, Inc. Price and Consensus

Arrow Electronics, Inc. Price and Consensus

Arrow Electronics, Inc. price-consensus-chart | Arrow Electronics, Inc. Quote

Arrow’s core strength of providing best-in-class services and easy-to-acquire technologies is likely to bolster its growth in the future. The company has secured a significant market share through its broad portfolio of products and services and continued efforts to maximize consumer satisfaction.

In September, Arrow entered a collaboration with The Things Industries, a LoRaWAN solutions provider, under which the two organizations agreed to provide LoRaWAN-enabled device design solutions. Before that, in July, the company secured an EMEA-wide distribution agreement with the cloud management solution provider, InContinuum Software.

The latest forecast for worldwide IT spending by Gartner is a positive for the company. Worldwide IT spending is anticipated to be $4.66 trillion in 2023, suggesting an increase of 5.1% from the expected $4.43 trillion in 2022. The research firm expects worldwide spending on IT services to grow 7.9% year over year to $1.36 trillion in 2023.

During the third quarter of 2022, Arrow reported revenues of $9.27 billion, up 9% from the year-ago quarter. Excluding the impacts of unfavorable currency exchange rates, sales increased 14% in the reported quarter. For the current quarter, ARW’s Zacks Consensus Estimate for revenues stands at $9.12 billion, suggesting 1.2% year-over-year growth.

However, Arrow’s near-term prospects look gloomy, with organizations pushing back their investments in big and expensive technology products due to global economic slowdown concerns. The company’s highly leveraged balance sheet has limited its financial flexibility, while intense competition and currency headwinds remain major concerns.

Shares of the company have lost 13.8% in the past year.

Zacks Rank & Stocks to Consider

Arrow currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader Computer and Technology sector are Zscaler ZS and Okta OKTA, each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Zscaler's first-quarter fiscal 2023 earnings has been revised 7 cents north to 26 cents per share over the past 60 days. For fiscal 2023, earnings estimates have moved north by 15 cents to $1.18 per share in the past 60 days.

ZS' earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 28.6%. Shares of the company have declined 66.5% in the past year.

The Zacks Consensus Estimate for Okta's third-quarter fiscal 2023 loss has been revised 3 cents northward to 24 cents per share over the past 90 days. For fiscal 2023, loss estimates have improved by 3 cents to 72 cents per share in the past 60 days.

OKTA’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 45.5%. Shares of the company have plunged 81.6% in the past year.

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