| Snowflake Score | |
|---|---|
| Valuation | 4/6 |
| Future Growth | 0/6 |
| Past Performance | 5/6 |
| Financial Health | 5/6 |
| Dividends | 2/6 |
AVT Stock Overview
Avnet, Inc., a technology solutions company, markets, sells, and distributes electronic components.
Avnet Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$45.36 |
| 52 Week High | US$50.19 |
| 52 Week Low | US$35.71 |
| Beta | 1.29 |
| 1 Month Change | 4.20% |
| 3 Month Change | -0.81% |
| 1 Year Change | 8.21% |
| 3 Year Change | 9.72% |
| 5 Year Change | 21.45% |
| Change since IPO | 185.73% |
Recent News & Updates
Avnet: Volatility Is Playing Well For Shareholders
Avnet has had a nice run higher recently, driven by attractive fundamental performance. Current expectations for the firm are positive and AVT stock looks cheap. Even a return to more normal activity should offer investors with some upside potential from here. Although the nature of value investing is to gravitate toward companies that are less volatile, a firm can be both attractive and volatile at the same time. One good example of this can be seen by looking at Avnet (AVT), a global technology distributor and solutions company that sells electronic components and provides various services to its customers related to the development, prototyping, and testing of products. Although the company's fundamental condition has been volatile in recent years, the overall picture has been positive. Add on top of this the fact that shares have recently traded at low levels, and it stands to reason that there could be some nice upside on the table moving forward. Of course, these are uncertain times and the picture for any one business can change materially from quarter to quarter. And with the enterprise slated to report financial performance for the final quarter of its 2022 fiscal year on August 10th, investors should keep a close eye on what management is expecting and on what analysts think will occur. So long as there is not anything significantly negative, upside potential for investors could be quite nice. And because of this, I have decided to retain my ‘buy’ rating on its stock even though shares have risen nicely in the past few months. Avnet's strength continues Back in March of this year, I wrote an article that looked upon Avnet in a favorable light. In that article, I said that the enterprise had a history of consistent revenue growth if we ignore the pain caused by the COVID-19 pandemic. On the other hand, I said that profits and cash flows have been more volatile during the past few years. Despite this, I said that shares of the company looked cheap and that recent performance indicated further upside was probably on the table. Ultimately, this led me to rate the business a ‘buy’, reflecting my belief that it would probably outperform the broader market for the foreseeable future. So far, that claim has played out pretty well. While the S&P 500 is down 4% since the publication of that article, shares of Avnet have risen by 18.5%. Author - SEC EDGAR Data This increase during a down market is not without cause. Consider how the company fared when it reported results for the third quarter of its 2022 fiscal year, the only quarter for which new data is now available that was not available when I last wrote about the business. In that quarter, sales for the firm skyrocketed, rising by 32% from $4.92 billion in the third quarter of 2021 to $6.49 billion the same time this year. Had foreign currency remained stable year over year, sales growth would have been even higher at 35.7%. According to management, this increase in revenue was driven pretty much entirely by strong demand for electronic components and for the services it offers. Thanks to strong revenue in that third quarter, revenue for the first nine months of the 2022 fiscal year remained strong, coming in at $17.94 billion. That's 25.4% above the $14.31 billion generated just one year earlier. Author - SEC EDGAR Data This surge in revenue brought with it a rise and profitability as well. Net income in the latest quarter totaled $183.4 million. That compares to the $107.5 million reported in the third quarter of 2021. Operating cash flow rose from negative $9.9 million to a positive $243.8 million. If we adjust for changes in working capital, it would have risen from $159.4 million to $273.5 million. Meanwhile, EBITDA jumped from $139.7 million to $347.5 million over the same timeframe. These results had the positive impact of helping profitability for the first nine months of the year as a whole. That income, for instance, rose from $107.8 million in the first nine months of the firm's 2021 fiscal year to $445.6 million this year. Operating cash flow dropped from $197.5 million to negative $19.4 million, while the adjusted figure for this jumped from $309.5 million to $641.3 million. And EBITDA managed to soar from $386.9 million to $832.5 million. In addition to benefiting from an increase in sales, the surge in demand allowed the company to push its cost structure lower. Gross profit margin, for instance, improved thanks to sales growth in the higher-profit western regions in which it operates. And with demand so high, the company didn't have to spend as much, relative to sales, on selling, general, and administrative costs. It's also worth noting that this strong bottom line performance came even as the company incurred $26.3 million in expenses associated with the conflict between Russia and Ukraine. At present, the current expectation is for the company to continue to generate strong performance when it reports data for the final quarter of the year. Management previously forecasted revenue of between $6 billion and $6.4 billion for the quarter. That compares to the $4.16 billion the company reported in the final quarter of its 2021 fiscal year. Meanwhile, analysts think that revenue will come in at about $6.29 billion. But if the third quarter was any indication, the firm might overdeliver. In that third quarter, the company beat on expectations to the tune of $779.68 million. And when it comes to profitability, management currently expects earnings per share of between $1.90 and $2. At the midpoint, this would translate to net income of $194 million. One year earlier, earnings per share totaled just $0.53. These numbers are not too far off from what analysts anticipate. At present, analysts believe the company will report earnings $1.82, with adjusted earnings per share of $1.99. It will be interesting to see how current economic conditions impact the end result.
Estimating The Fair Value Of Avnet, Inc. (NASDAQ:AVT)
Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Avnet, Inc...
Avnet names Kenneth Jacobson as new CFO
Avnet (NASDAQ:AVT) has named seasoned corporate executive Kenneth Jacobson as its new CFO, effective Sep. 06, 2022. Jacobson, currently Avnet's (AVT) corporate controller, will succeed Thomas Liguori who has stepped down to begin a new chapter of opportunities in the public, private and university sectors. Liguori will be available to Avnet as a senior advisor through March 2023 to assist with the transition.
Shareholder Returns
| AVT | US Electronic | US Market | |
|---|---|---|---|
| 7D | -4.7% | -0.7% | 1.1% |
| 1Y | 8.2% | -14.3% | -13.0% |
Return vs Industry: AVT exceeded the US Electronic industry which returned -14.3% over the past year.
Return vs Market: AVT exceeded the US Market which returned -13% over the past year.
Price Volatility
| AVT volatility | |
|---|---|
| AVT Average Weekly Movement | 4.2% |
| Electronic Industry Average Movement | 7.7% |
| Market Average Movement | 7.9% |
| 10% most volatile stocks in US Market | 17.1% |
| 10% least volatile stocks in US Market | 3.2% |
Stable Share Price: AVT is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: AVT's weekly volatility (4%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1921 | 14,500 | Phil Gallagher | https://www.avnet.com |
Avnet, Inc., a technology solutions company, markets, sells, and distributes electronic components. The company operates through two segments, Electronic Components and Farnell. The Electronic Components segment markets, sells, and distributes semiconductors; interconnect, passive, and electromechanical devices; and other integrated components from electronic component manufacturers.
Avnet Fundamentals Summary
| AVT fundamental statistics | |
|---|---|
| Market Cap | US$4.43b |
| Earnings (TTM) | US$530.91m |
| Revenue (TTM) | US$23.16b |
8.3x
P/E Ratio0.2x
P/S RatioIs AVT overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| AVT income statement (TTM) | |
|---|---|
| Revenue | US$23.16b |
| Cost of Revenue | US$20.33b |
| Gross Profit | US$2.83b |
| Other Expenses | US$2.30b |
| Earnings | US$530.91m |
Last Reported Earnings
Apr 02, 2022
Next Earnings Date
Aug 10, 2022
| Earnings per share (EPS) | 5.44 |
| Gross Margin | 12.22% |
| Net Profit Margin | 2.29% |
| Debt/Equity Ratio | 31.6% |
How did AVT perform over the long term?
See historical performance and comparisonDividends
2.3%
Current Dividend Yield18%
Payout RatioValuation
Is AVT undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
4/6Valuation Score 4/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast
Key Valuation Metric
Which metric is best to use when looking at relative valuation for AVT?
Other financial metrics that can be useful for relative valuation.
| What is AVT's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$4.43b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 0.3x |
| Enterprise Value/EBITDA | 6.1x |
| PEG Ratio | 7.2x |
Price to Earnings Ratio vs Peers
How does AVT's PE Ratio compare to its peers?
| AVT PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 10.8x | ||
NSIT Insight Enterprises | 12x | 9.5% | US$3.2b |
ARW Arrow Electronics | 4.9x | -19.2% | US$6.9b |
CNXN PC Connection | 14.2x | 3.8% | US$1.3b |
PLUS ePlus | 12x | 4.3% | US$1.3b |
AVT Avnet | 8.3x | 1.2% | US$4.4b |
Price-To-Earnings vs Peers: AVT is good value based on its Price-To-Earnings Ratio (8.3x) compared to the peer average (10.8x).
Price to Earnings Ratio vs Industry
How does AVT's PE Ratio compare vs other companies in the US Electronic Industry?
Price-To-Earnings vs Industry: AVT is good value based on its Price-To-Earnings Ratio (8.3x) compared to the US Electronic industry average (16.1x)
Price to Earnings Ratio vs Fair Ratio
What is AVT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 8.3x |
| Fair PE Ratio | 16.4x |
Price-To-Earnings vs Fair Ratio: AVT is good value based on its Price-To-Earnings Ratio (8.3x) compared to the estimated Fair Price-To-Earnings Ratio (16.4x).
Share Price vs Fair Value
What is the Fair Price of AVT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: AVT ($45.36) is trading below our estimate of fair value ($51.77)
Significantly Below Fair Value: AVT is trading below fair value, but not by a significant amount.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is less than 20% higher than the current share price.
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Future Growth
How is Avnet forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?
Future Growth Score
0/6Future Growth Score 0/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE
1.2%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: AVT's forecast earnings growth (1.2% per year) is below the savings rate (1.9%).
Earnings vs Market: AVT's earnings (1.2% per year) are forecast to grow slower than the US market (14.6% per year).
High Growth Earnings: AVT's earnings are forecast to grow, but not significantly.
Revenue vs Market: AVT's revenue (2% per year) is forecast to grow slower than the US market (7.9% per year).
High Growth Revenue: AVT's revenue (2% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: AVT's Return on Equity is forecast to be low in 3 years time (13.5%).
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Past Performance
How has Avnet performed over the past 5 years?
Past Performance Score
5/6Past Performance Score 5/6
Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE
15.4%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: AVT has high quality earnings.
Growing Profit Margin: AVT's current net profit margins (2.3%) are higher than last year (0.9%).
Past Earnings Growth Analysis
Earnings Trend: AVT's earnings have grown by 15.4% per year over the past 5 years.
Accelerating Growth: AVT's earnings growth over the past year (237.5%) exceeds its 5-year average (15.4% per year).
Earnings vs Industry: AVT earnings growth over the past year (237.5%) exceeded the Electronic industry 26.1%.
Return on Equity
High ROE: AVT's Return on Equity (12.5%) is considered low.
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Financial Health
How is Avnet's financial position?
Financial Health Score
5/6Financial Health Score 5/6
Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage
Financial Position Analysis
Short Term Liabilities: AVT's short term assets ($8.2B) exceed its short term liabilities ($4.1B).
Long Term Liabilities: AVT's short term assets ($8.2B) exceed its long term liabilities ($1.5B).
Debt to Equity History and Analysis
Debt Level: AVT's net debt to equity ratio (26.9%) is considered satisfactory.
Reducing Debt: AVT's debt to equity ratio has reduced from 34.4% to 31.6% over the past 5 years.
Debt Coverage: AVT's operating cash flow is negative, therefore debt is not well covered.
Interest Coverage: AVT's interest payments on its debt are well covered by EBIT (9.1x coverage).
Balance Sheet
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Dividend
What is Avnet current dividend yield, its reliability and sustainability?
Dividend Score
2/6Dividend Score 2/6
Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage
2.29%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: AVT's dividend (2.29%) is higher than the bottom 25% of dividend payers in the US market (1.52%).
High Dividend: AVT's dividend (2.29%) is low compared to the top 25% of dividend payers in the US market (4.08%).
Stability and Growth of Payments
Stable Dividend: Whilst dividend payments have been stable, AVT has been paying a dividend for less than 10 years.
Growing Dividend: AVT's dividend payments have increased, but the company has only paid a dividend for 9 years.
Earnings Payout to Shareholders
Earnings Coverage: With its low payout ratio (17.9%), AVT's dividend payments are well covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: AVT is paying a dividend but the company has no free cash flows.
Discover strong dividend paying companies
Management
How experienced are the management team and are they aligned to shareholders interests?
4.0yrs
Average management tenure
CEO
Phil Gallagher (61 yo)
5yrs
Tenure
US$6,151,987
Compensation
Mr. Philip R. Gallagher, also known as Phil, has been the Chief Executive Officer of Avnet, Inc. since November 23, 2020 and serves as its Director Since November 2020. He serves as Member of Executive Boa...
CEO Compensation Analysis
Compensation vs Market: Phil's total compensation ($USD6.15M) is about average for companies of similar size in the US market ($USD6.59M).
Compensation vs Earnings: Phil's compensation has increased by more than 20% in the past year.
Leadership Team
Experienced Management: AVT's management team is considered experienced (4 years average tenure).
Board Members
Experienced Board: AVT's board of directors are considered experienced (4 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
Avnet, Inc.'s employee growth, exchange listings and data sources
Key Information
- Name: Avnet, Inc.
- Ticker: AVT
- Exchange: NasdaqGS
- Founded: 1921
- Industry: Technology Distributors
- Sector: Tech
- Implied Market Cap: US$4.431b
- Shares outstanding: 97.68m
- Website: https://www.avnet.com
Number of Employees
Location
- Avnet, Inc.
- 2211 South 47th Street
- Phoenix
- Arizona
- 85034
- United States
Listings
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/08/09 00:00 |
| End of Day Share Price | 2022/08/09 00:00 |
| Earnings | 2022/04/02 |
| Annual Earnings | 2021/07/03 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.