📊 AROW Key Takeaways
Is Arrow Financial Corp. (AROW) a Good Investment?
Arrow Financial demonstrates strong operational profitability with a 49.7% operating margin and robust free cash flow generation of $36.2M, but the unusually high 135.5% net margin and modest ROA of 1.0% suggest potential accounting anomalies or one-time gains that warrant clarification. The extremely low 0.2x interest coverage ratio and minimal long-term debt utilization indicate either conservative financial positioning or potential constraints on leverage capacity.
Arrow Financial shows solid core fundamentals for a community bank, with healthy profitability, a strong capital base, very low long-term debt, and positive free cash flow generation. However, earnings quality looks mixed because revenue grew strongly while net income was essentially flat, and several reported ratios appear distorted for a bank balance sheet, which lowers conviction. The fundamentals support stability more than a clear acceleration story.
Why Buy Arrow Financial Corp. Stock? AROW Key Strengths
- Strong operating margin of 49.7% demonstrates operational efficiency
- Excellent free cash flow generation of $36.2M with 111.6% FCF margin supporting sustainability
- Conservative balance sheet with minimal leverage (0.01x debt-to-equity) and $214.2M in liquid cash
- Revenue growth of 15.5% YoY indicates market demand strength
- ROA of 1.0% and ROE of 10.2% indicate respectable bank-level profitability
- Balance sheet leverage appears conservative with only $4.26M of long-term debt against $431.85M of equity
- Operating cash flow of $41.28M and free cash flow of $36.19M suggest good internal capital generation
AROW Stock Risks: Arrow Financial Corp. Investment Risks
- Abnormally high net margin of 135.5% suggests non-operational income or one-time gains distorting true profitability
- Critically low interest coverage of 0.2x raises concerns about debt servicing capability despite minimal debt
- ROA of only 1.0% indicates poor asset utilization efficiency relative to $4.4B asset base
- EPS growth of 49.7% YoY diverges significantly from net income growth of 0.3%, suggesting share buybacks or restructuring rather than organic earnings growth
- Net income growth of only 0.3% despite 15.5% revenue growth suggests margin pressure or weaker earnings conversion
- Reported net margin of 135.5% and interest coverage of 0.2x indicate data distortion or non-recurring accounting effects, reducing clarity on true earnings quality
- As a commercial bank, future results remain sensitive to credit quality deterioration, deposit costs, and net interest margin compression
Key Metrics to Watch
- Quality of earnings analysis - isolate operating vs. non-operating income components
- Asset efficiency trends and loan portfolio composition given banking sector classification
- Sustainability of 15.5% revenue growth rate and margin stability in subsequent quarters
- Form 4 insider trading patterns (24 filings in 90 days) for director/officer sentiment signals
- Net interest margin and provision for credit losses
- Deposit mix, nonperforming assets, and tangible common equity ratio
Arrow Financial Corp. (AROW) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 111.6% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. The current ratio below 1.0x warrants monitoring of short-term liquidity.
AROW Profit Margin, ROE & Profitability Analysis
AROW vs Finance Sector: How Arrow Financial Corp. Compares
How Arrow Financial Corp. compares to Finance sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Arrow Financial Corp. Stock Overvalued? AROW Valuation Analysis 2026
Based on fundamental analysis, Arrow Financial Corp. appears fundamentally strong relative to the Finance sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Arrow Financial Corp. Balance Sheet: AROW Debt, Cash & Liquidity
AROW Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Arrow Financial Corp.'s revenue has remained relatively flat over the 5-year period, with a 0% decline. The most recent EPS of $1.77 reflects profitable operations.
AROW Revenue Growth, EPS Growth & YoY Performance
Arrow Financial Corp. Dividends, Buybacks & Capital Allocation
AROW SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Arrow Financial Corp. (CIK: 0000717538)
📋 Recent SEC Filings
❓ Frequently Asked Questions about AROW
What is the AI rating for AROW?
Arrow Financial Corp. (AROW) has a Combined AI Rating of HOLD from Claude (HOLD) and ChatGPT (HOLD) with 62% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are AROW's key strengths?
Claude: Strong operating margin of 49.7% demonstrates operational efficiency. Excellent free cash flow generation of $36.2M with 111.6% FCF margin supporting sustainability. ChatGPT: ROA of 1.0% and ROE of 10.2% indicate respectable bank-level profitability. Balance sheet leverage appears conservative with only $4.26M of long-term debt against $431.85M of equity.
What are the risks of investing in AROW?
Claude: Abnormally high net margin of 135.5% suggests non-operational income or one-time gains distorting true profitability. Critically low interest coverage of 0.2x raises concerns about debt servicing capability despite minimal debt. ChatGPT: Net income growth of only 0.3% despite 15.5% revenue growth suggests margin pressure or weaker earnings conversion. Reported net margin of 135.5% and interest coverage of 0.2x indicate data distortion or non-recurring accounting effects, reducing clarity on true earnings quality.
What is AROW's revenue and growth?
Arrow Financial Corp. reported revenue of $32.4M.
Does AROW pay dividends?
Arrow Financial Corp. pays dividends, with $17.4M distributed to shareholders in the trailing twelve months.
Where can I find AROW SEC filings?
Official SEC filings for Arrow Financial Corp. (CIK: 0000717538) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is AROW's EPS?
Arrow Financial Corp. has a diluted EPS of $2.65.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is AROW a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Arrow Financial Corp. has a HOLD rating with 62% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is AROW stock overvalued or undervalued?
Valuation metrics for AROW: ROE of 10.2% (sector avg: 12%), net margin of 135.5% (sector avg: 25%). Compare these metrics with sector averages to assess valuation.
Should I buy AROW stock in 2026?
Our dual AI analysis gives Arrow Financial Corp. a combined HOLD rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is AROW's free cash flow?
Arrow Financial Corp.'s operating cash flow is $41.3M, with capital expenditures of $5.1M. FCF margin is 111.6%.
How does AROW compare to other Finance stocks?
Vs Finance sector averages: Net margin 135.5% (avg: 25%), ROE 10.2% (avg: 12%), current ratio N/A (avg: 1.2).