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1. Company Snapshot

1.a. Company Description

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.


It also offers design chain support that provides engineers with technical design solutions; engineering and technical resources to support product design, bill of materials development, and technical education and training; and supply chain solutions that provide support and logistical services to original equipment manufacturers, electronic manufacturing service providers, and electronic component manufacturers.In addition, this segment provides integrated solutions, such as technical design, integration, and assembly of embedded products, and systems and solutions primarily for industrial applications, as well as for intelligent and innovative embedded display solutions comprising touch and passive displays.Further, it develops and manufactures standard board and industrial subsystems, and application-specific devices that enable it to produce systems tailored to specific customer requirements.


This segment serves various markets, such as automotive, medical, defense, aerospace, telecommunications, industrial, and digital editing.The Farnell segment distributes kits, tools, and electronic and industrial automation components, as well as test and measurement products to engineers and entrepreneurs.It has operations in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.


Avnet, Inc.was founded in 1921 and is headquartered in Phoenix, Arizona.

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1.b. Last Insights on AVT

Avnet's recent performance was positively driven by its Q4 earnings beat, with quarterly earnings of $0.81 per share exceeding the Zacks Consensus Estimate of $0.72 per share. The company's revenue rose 1% to $5,617.8 million. Additionally, Avnet's international revenue trends are being closely watched by financial analysts, and the company's stable margins and strong cash flow are notable. A 6% increase in quarterly dividend also underscores the company's commitment to shareholder value. (Source: Zacks)

1.c. Company Highlights

2. Avnet's Q1 FY2026 Earnings: A Strong Start to the Year

Avnet reported sales of $5.9 billion for the first quarter of fiscal year 2026, above guidance, and adjusted EPS of $0.84, near the high end of guidance. The company's gross margin was 10.4%, 42 basis points lower year-over-year, primarily driven by declines in the Western regions. Adjusted operating income was $151 million, and adjusted operating margin was 2.6%. The actual EPS of $0.84 beat estimates of $0.81, indicating a strong performance.

Publication Date: Nov -03

📋 Highlights
  • Revenue Growth Exceeds Guidance:: Sales reached $5.9 billion, surpassing guidance, with adjusted EPS at $0.84 near the high end of expectations.
  • Regional Strength in Asia and Farnell:: Both regions delivered double-digit year-on-year growth, driving overall performance.
  • Americas Growth Resumes:: Year-on-year sales growth returned in the Americas for the first time since fiscal 2023.
  • Inventory Optimization Progress:: Inventory days decreased to 92, down 3 days sequentially, with a target to reach the 80s in the next quarter.
  • Book-to-Bill Ratio Improves:: All regions exceeded parity, with Asia and the Americas leading the global improvement.

Regional Performance

The performance was led by strength in Asia and Farnell, which both had double-digit year-on-year growth. Sales in the Americas region grew year-on-year for the first time since fiscal 2023, while EMEA region sales were flat year-over-year. The book-to-bill ratio improved globally, led by Asia and the Americas, and all regions were above parity.

Segment-wise Performance

The Electronic Components segment saw sales increase 5% year-over-year and sequentially, driven by growth in Asia and the Americas. Farnell delivered sequential and year-on-year growth, with operating margin remaining stable sequentially. The company saw strength in certain key vertical segments, including transportation, compute, and communication.

Guidance and Outlook

Guidance for the second quarter of fiscal 2026 is for sales in the range of $5.85 billion to $6.15 billion and diluted earnings per share in the range of $0.90 to $1. The company continues to focus on balancing growth opportunities with reductions in inventory and optimizing the inventory on hand. Analysts estimate next year's revenue growth at 7.9%, indicating a positive outlook.

Valuation

Avnet's current P/E Ratio is 17.26, indicating that the stock is trading at a premium. The EV/EBITDA ratio is 11.43, which is relatively reasonable. The Dividend Yield is 2.77%, providing a relatively stable source of return. With an ROE of 4.76% and ROIC of 5.72%, the company's profitability metrics are moderate, justifying the current valuation to some extent.

Operational Efficiency

The company used $145 million of cash for operations in the quarter, primarily due to the increase in receivables to support growth in Asia revenues. Inventory days decreased by 3 days sequentially to 92 days, with a goal to get back into the 80s long-term. The company aims to continue driving top-line growth while keeping inventory days in the 80s.

3. NewsRoom

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Avnet to Participate in the Nasdaq Investor Conference on December 9

Nov -24

Source: businesswire.com

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Bear of the Day: Avnet (AVT)

Nov -14

Source: zacks.com

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Avnet, Inc. $AVT Shares Acquired by Bank of New York Mellon Corp

Nov -11

Source: defenseworld.net

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Arkadios Wealth Advisors Acquires New Holdings in Avnet, Inc. $AVT

Nov -06

Source: defenseworld.net

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Avnet Q1 Earnings Beat Estimates, Stock Falls on Dim Q2 EPS Guidance

Oct -30

Source: zacks.com

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Avnet, Inc. (AVT) Q1 2026 Earnings Call Transcript

Oct -29

Source: seekingalpha.com

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Avnet (AVT) Q1 Earnings: Taking a Look at Key Metrics Versus Estimates

Oct -29

Source: zacks.com

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Avnet (AVT) Q1 Earnings and Revenues Surpass Estimates

Oct -29

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.55%)

6. Segments

Electronic Components

Expected Growth: 8.5%

Avnet's Electronic Components segment growth of 8.5% is driven by increasing demand for IoT and AI-enabled devices, rising adoption of 5G technology, and growing need for autonomous vehicles. Additionally, the company's strategic acquisitions and partnerships have expanded its customer base and enhanced its product offerings, contributing to the segment's growth.

Farnell

Expected Growth: 9.27%

Farnell's 9.27% growth is driven by increasing demand for electronic components in IoT, AI, and 5G applications. Strong online presence, expanded product offerings, and strategic partnerships also contribute to growth. Additionally, Farnell's focus on digital transformation, improved customer experience, and operational efficiency further support its growth momentum.

7. Detailed Products

Electronic Components

Avnet offers a wide range of electronic components from leading manufacturers, including semiconductors, interconnects, passive and electromechanical components, and embedded systems.

Embedded Systems

Avnet provides embedded systems solutions, including single-board computers, system-on-modules, and development kits, for industrial, medical, and consumer applications.

Internet of Things (IoT) Solutions

Avnet offers IoT solutions, including hardware, software, and services, to connect and manage devices, sensors, and data analytics.

Cybersecurity Solutions

Avnet provides cybersecurity solutions, including threat detection, incident response, and security consulting services, to protect against cyber threats.

Data Center and Cloud Solutions

Avnet offers data center and cloud solutions, including servers, storage, and networking solutions, for enterprise and cloud service providers.

Supply Chain Services

Avnet provides supply chain services, including inventory management, logistics, and procurement, to optimize the supply chain for OEMs and EMS providers.

Design and Engineering Services

Avnet offers design and engineering services, including hardware and software design, prototyping, and testing, for product development.

8. Avnet, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Avnet's customers have some alternatives for their products and services, but the switching costs are relatively high, which reduces the threat of substitutes.

Bargaining Power Of Customers

Avnet's customers have significant bargaining power due to their large size and purchasing power, which allows them to negotiate better prices and terms.

Bargaining Power Of Suppliers

Avnet has a diverse supplier base, which reduces the bargaining power of individual suppliers, and the company's large size and purchasing power also give it an upper hand in negotiations.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the electronics distribution industry, including the need for significant capital investment and established relationships with suppliers and customers.

Intensity Of Rivalry

The electronics distribution industry is highly competitive, with several large players competing for market share, which leads to intense rivalry and pricing pressure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.99%
Debt Cost 9.69%
Equity Weight 59.01%
Equity Cost 10.07%
WACC 9.92%
Leverage 69.47%

11. Quality Control: Avnet, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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InterDigital

A-Score: 6.6/10

Value: 3.0

Growth: 8.8

Quality: 9.0

Yield: 3.0

Momentum: 10.0

Volatility: 6.0

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TD Synnex

A-Score: 5.7/10

Value: 6.0

Growth: 5.6

Quality: 4.4

Yield: 2.0

Momentum: 8.5

Volatility: 7.7

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Avnet

A-Score: 5.6/10

Value: 6.9

Growth: 5.2

Quality: 3.2

Yield: 6.0

Momentum: 4.0

Volatility: 8.0

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PC Connection

A-Score: 5.1/10

Value: 5.5

Growth: 5.8

Quality: 5.9

Yield: 2.0

Momentum: 2.5

Volatility: 8.7

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Arrow Electronics

A-Score: 4.8/10

Value: 7.2

Growth: 6.6

Quality: 4.2

Yield: 0.0

Momentum: 3.5

Volatility: 7.7

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Insight Enterprises

A-Score: 3.8/10

Value: 5.3

Growth: 7.0

Quality: 3.7

Yield: 0.0

Momentum: 0.5

Volatility: 6.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

49.67$

Current Price

49.67$

Potential

-0.00%

Expected Cash-Flows