Is Arrow Electronics, Inc. overvalued or undervalued?

As of 13 February 2025, Arrow Electronics, Inc. has moved from expensive to very expensive in its valuation grade. The company is currently overvalued, with a P/E ratio of 27, which is significantly higher than its peer TD SYNNEX Corp., which has a P/E of 16.21. Additionally, Arrow's EV to EBITDA stands at 15.51, compared to TD SYNNEX's 9.19, further indicating a premium valuation relative to its peers.
The company's ROCE is at 10.01% and ROE at 8.10%, which do not justify the high valuation multiples. With the current price at $125.96, Arrow Electronics has underperformed the S&P 500 over the past year, although it has shown a positive return of 11.35% year-to-date, contrasting with the index's 2.44%. Overall, the high valuation metrics suggest that Arrow Electronics is overvalued in the current market environment.