Arrow Financial Corporation (AROW) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

-28.6%

$28.01

vs $39.26 price

Levered DCF

$27.12

After debt service

Piotroski score

5 / 9

Average

Altman Z-score

0.2

Distress zone

Rating

B-

Overall 3 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	11.8×	16.13×	15.79×	11.81×	11.67×	12×	16.46×	13.47×
P/B	1.2×	1.2×	1.25×	1.63×	1.57×	1.47×	2.05×	1.82×
P/S	2.14×	2.15×	2.48×	3.59×	3.93×	3.39×	4.46×	3.9×
EV / EBITDA	8.52×	8.42×	9.16×	8.78×	2.68×	3.36×	17.37×	19.83×
Gross margin	65.3%	60.4%	68.1%	90.0%	96.3%	84.8%	82.8%	88.0%
Operating margin	22.8%	16.7%	19.6%	39.2%	43.5%	35.9%	34.0%	36.1%
Net margin	18.1%	13.3%	15.7%	30.4%	33.7%	28.2%	27.1%	28.9%
Current ratio	0.04×	0.16×	0.17×	0.18×	0.29×	0.23×	0.15×	0.15×
Debt / equity	0.07×	0.08×	0.19×	0.3×	0.19×	0.26×	1.21×	2.18×
Interest coverage	0.72×	0.45×	0.65×	5.56×	12.4×	4.09×	2.17×	3.63×
Dividend yield	3.6%	3.8%	3.8%	3.0%	2.8%	3.2%	2.5%	2.9%
Payout ratio	43.0%	61.6%	59.8%	35.7%	32.7%	38.6%	40.6%	39.7%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	10.2%	7.4%	7.9%	13.8%	13.4%	12.2%	12.4%	13.5%
Return on invested capital	-7.2%	6.2%	6.2%	10.4%	10.4%	9.0%	6.6%	5.6%
Return on assets	1.0%	0.7%	0.7%	1.2%	1.2%	1.1%	1.2%	1.2%
Free cash flow yield	7.0%	6.0%	2.8%	7.9%	10.5%	7.6%	5.9%	7.5%
Earnings yield	8.5%	6.2%	6.3%	8.5%	8.6%	8.3%	6.1%	7.4%
Enterprise value	$518.3M	$359.6M	$405M	$618.8M	$193.6M	$197.5M	$913.2M	$992.8M
Net debt / EBITDA	0×	-2.83×	-1.6×	0.6×	-5.37×	-4.99×	5.63×	10.06×
Cash conversion cycle (days)	0	0	0	0	0	0	0	0