Avnet Inc

AVT

Wholesale-Electronic Parts & Equipment, NEC

Mkt Cap

$4.97B

PE

8.70

Debt

$2.955B

Cash

$218.5M

EV

$7.706B

FCF

$393.2M

Market Cap

$4.97B

P/E Ratio

8.70

Debt

$2.955B

Cash

$218.5M

EV

$7.706B

FCF

$393.2M

Charts data: {"Earnings":[{"time":"2014-06-27","value":545604000},{"time":"2015-06-26","value":571913000},{"time":"2016-07-01","value":506531000},{"time":"2017-06-30","value":525278000},{"time":"2018-06-29","value":-156424000},{"time":"2019-06-28","value":176337000},{"time":"2020-06-26","value":-31081000},{"time":"2021-07-02","value":193114000},{"time":"2022-07-01","value":692379000},{"time":"2023-06-30","value":770828000}],"Sales":[{"time":"2014-06-27","value":27499654000},{"time":"2015-06-26","value":27924657000},{"time":"2016-07-01","value":26219279000},{"time":"2017-06-30","value":17439963000},{"time":"2018-06-29","value":19036892000},{"time":"2019-06-28","value":19518592000},{"time":"2020-06-26","value":17634333000},{"time":"2021-07-02","value":19534679000},{"time":"2022-07-01","value":24310708000},{"time":"2023-06-30","value":26536881000}],"Net Margins":[{"time":"2014-06-27","value":0.019840395082789043},{"time":"2015-06-26","value":0.020480573852706588},{"time":"2016-07-01","value":0.01931902856672756},{"time":"2017-06-30","value":0.030119215275858098},{"time":"2018-06-29","value":-0.00821688750453593},{"time":"2019-06-28","value":0.009034309441992537},{"time":"2020-06-26","value":-0.001762527678251284},{"time":"2021-07-02","value":0.009885701218842654},{"time":"2022-07-01","value":0.0284804128287831},{"time":"2023-06-30","value":0.029047422717085703}],"Assets":[{"time":"2014-06-27","value":11255517000},{"time":"2015-06-26","value":10799953000},{"time":"2016-07-01","value":11239805000},{"time":"2017-06-30","value":9699589000},{"time":"2018-06-29","value":9596845000},{"time":"2019-06-28","value":8564556000},{"time":"2020-06-26","value":8105197000},{"time":"2021-07-02","value":8925422000},{"time":"2022-07-01","value":10388532000},{"time":"2023-06-30","value":12477159000}],"Stockholders Equity":[{"time":"2014-06-27","value":4890193000},{"time":"2015-06-26","value":4685021000},{"time":"2016-07-01","value":4691286000},{"time":"2017-06-30","value":5182068000},{"time":"2018-06-29","value":4685081000},{"time":"2019-06-28","value":4140473000},{"time":"2020-06-26","value":3726398000},{"time":"2021-07-02","value":4084184000},{"time":"2022-07-01","value":4192760000},{"time":"2023-06-30","value":4751669000}],"ROE":[{"time":"2014-06-27","value":0.11157105660246948},{"time":"2015-06-26","value":0.12207266520256793},{"time":"2016-07-01","value":0.10797273924463356},{"time":"2017-06-30","value":0.1013645517581012},{"time":"2018-06-29","value":-0.03338768315851957},{"time":"2019-06-28","value":0.04258861246046044},{"time":"2020-06-26","value":-0.00834076231256028},{"time":"2021-07-02","value":0.04728337410851225},{"time":"2022-07-01","value":0.16513680725822608},{"time":"2023-06-30","value":0.16222257905590645}],"ROA":[{"time":"2014-06-27","value":0.07160488496441345},{"time":"2015-06-26","value":0.0766367224005512},{"time":"2016-07-01","value":0.07007852894245051},{"time":"2017-06-30","value":0.04756902586284842},{"time":"2018-06-29","value":0.024019977398822216},{"time":"2019-06-28","value":0.04272387266777169},{"time":"2020-06-26","value":-0.0005709916736138554},{"time":"2021-07-02","value":0.03152881734891639},{"time":"2022-07-01","value":0.0903891906960483},{"time":"2023-06-30","value":0.09511780686613035}]}

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.

Sector

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9/30/23
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12/29/18
10-Q
9/29/18
10-K
6/30/18
10-Q
3/31/18
10-Q
12/30/17

DCF

Discounted Cash Flow Valuation of Avnet Inc

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$393.2M	$420.3M	$448.5M	$477.6M	$507.5M	$538.3M	$569.8M	$601.9M	$634.5M	$667.6M	$701M	$7.01B
DCF		$365.5M	$339.1M	$314M	$290.2M	$267.6M	$246.3M	$226.3M	$207.4M	$189.8M	$173.3M	$1.733B
Value	$4.352B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 2.8%

Earnings Stability -22%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	06-2015	07-2016	06-2017	06-2018	06-2019	06-2020	07-2021	07-2022	06-2023	TTM
Net Margin	2%	1.9%	3%	-0.82%	0.9%	-0.18%	0.99%	2.8%	2.9%	2.3%
ROA	7.7%	7%	4.8%	2.4%	4.3%	-0.057%	3.2%	9%	9.5%	7.8%
ROE	12%	11%	10%	-3.3%	4.3%	-0.83%	4.7%	17%	16%	11%

What is the average Net Margin?

The average Net Margin over the past 5 years is +1.11%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.73%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +4.72%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +1.52%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +6.26%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +4%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	06-2015	07-2016	06-2017	06-2018	06-2019	06-2020	07-2021	07-2022	06-2023	TTM
Debt FCF	5.65	47.63	18.31	18.76	4.33	2.18	30.73	-6.70	-3.46	7.52
Debt Equity	0.49	0.78	0.36	0.39	0.49	0.38	0.31	0.43	0.66	0.59
MIN
Graham Stability	-	-	97%	-29%	60%	-17%	-	100%	100%	-29%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 7.52.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -3.30.

What is the Graham’s Stability?

Graham’s Stability measure stands at -0.29.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	07-2016	06-2018	06-2020	07-2022	Trend
Revenue	0.17%	6.9%	15%	9.2%	3.2%
Net Income	6.2%	-	-	11%	18%
Stockholders Equity	0.18%	0.28%	8.4%	13%	1.3%
FCF	-	-	-	-	-17%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +6.87%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +3.2%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +17.58%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +0.28%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +1.26%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -16.64%.