Value
7.8/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.0 |
| P/S | 7.7 |
| Fwd P/E | 9.4 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 8.9x
- ▸PEG: 0.14
- ▸Attractively valued
AROW · Why this verdict
Why Arrow Financial (AROW) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score6.7/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Arrow Financial is a fast-growing small regional bank (40% growth, forward P/E 8.9x, 24% margins) with a good beat record, but price is already 3.6% above the analyst target and quality is below average, so it is a hold rather than an add.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Arrow is growing 40% year over year with earnings growth scoring a perfect 10, making it an industry growth leader among regional banks. Growth breakdown | Growth stays above 20% over the next 12 months. | ↑Improving |
| CounterGrowth of 40% at a small bank may reflect acquisition or rate effects that do not repeat. | ||
The stock trades at a forward P/E of 8.9x and a PEG of 0.14 with margins of 24% and a Piotroski F-Score of 7/9. Valuation breakdown | Earnings growth holds so the low multiple supports further price gains. | →Stable |
| CounterThere is no competitive moat and peer quality rank is only 2.0, so the discount may reflect weaker credit or deposit franchise. | ||
Arrow beat estimates in 3 of the last 4 quarters, including 3.7% in the October 29 report, offset by a 16.5% miss in July. Earnings | The January 28, 2027 report beats estimates. | →Stable |
| CounterAverage surprise is slightly negative at -0.67% because of the July miss, so the record is not as clean as the beat count suggests. | ||
Price is 3.6% above the analyst target, so reward-to-risk is negative at -0.51 and analyst coverage is light. Warnings | Analyst targets are raised above the $38.36 price after strong results. | ↓Deteriorating |
| CounterLight coverage means targets may simply be stale, and a breakout setup can run past a lagging target. | ||
Price is above the 200-day average in a breakout setup with a strong MACD, but falling OBV signals volume distribution. Momentum breakdown | Volume turns to accumulation and momentum stays above 5.5. | ↑Improving |
| CounterFalling volume during a breakout suggests weak conviction, and the breakout could fail. | ||
Arrow is growing 40% year over year with earnings growth scoring a perfect 10, making it an industry growth leader among regional banks.
↑ImprovingGrowth breakdown
- Expectation
- Growth stays above 20% over the next 12 months.
CounterGrowth of 40% at a small bank may reflect acquisition or rate effects that do not repeat.
The stock trades at a forward P/E of 8.9x and a PEG of 0.14 with margins of 24% and a Piotroski F-Score of 7/9.
→StableValuation breakdown
- Expectation
- Earnings growth holds so the low multiple supports further price gains.
CounterThere is no competitive moat and peer quality rank is only 2.0, so the discount may reflect weaker credit or deposit franchise.
Arrow beat estimates in 3 of the last 4 quarters, including 3.7% in the October 29 report, offset by a 16.5% miss in July.
→StableEarnings
- Expectation
- The January 28, 2027 report beats estimates.
CounterAverage surprise is slightly negative at -0.67% because of the July miss, so the record is not as clean as the beat count suggests.
Price is 3.6% above the analyst target, so reward-to-risk is negative at -0.51 and analyst coverage is light.
↓DeterioratingWarnings
- Expectation
- Analyst targets are raised above the $38.36 price after strong results.
CounterLight coverage means targets may simply be stale, and a breakout setup can run past a lagging target.
Price is above the 200-day average in a breakout setup with a strong MACD, but falling OBV signals volume distribution.
↑ImprovingMomentum breakdown
- Expectation
- Volume turns to accumulation and momentum stays above 5.5.
CounterFalling volume during a breakout suggests weak conviction, and the breakout could fail.
Per-dimension breakdown
Quality
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.2 |
| ROA | 0.6 |
| Gross margin | 0.0 |
| Op margin | 5.3 |
| Net margin | 10.0 |
| Moat | 5.4 |
| Piotroski F | 7.8 |
- ▸Strong margins: 24%
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 40% YoY
Momentum
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.3 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 5.7 |
- ▸Overbought (RSI 73)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.0 |
| Analyst rating | 6.3 |
| Price target | 6.6 |
- ▸LLM news sentiment: +0.40 (n=1)
- ▸Light analyst coverage (4.0) — signal dampened
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.7 |
| quality rank | 2.0 |
| growth rank | 8.9 |
- ▸Industry growth leader
Technical
2.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.1 |
| support resistance | 0.2 |
| 52w position | 8.5 |
Risk (lower is worse)
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.3 |
| days to cover | 2.4 |
| volatility | 6.5 |
| implied vol | 2.9 |
| beta | 8.6 |
- ▸High IV: 63%
Catalyst
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 2.2 |
| dividend safety | 5.5 |
| news activity | 6.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 3.1%
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULTPassed (6)
- MOMENTUM:7.8>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:86d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.6=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.63
Upside
-5.8%
Downside
9.2%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($0.7B) below institutional reach
SuitabilityAggressive — MCap $0.7B<$5B
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: MOMENTUM:7.8>=5.5. Top dim: Growth at 10.0; weakest: Technical at 2.9. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Growth at 10.0, Value at 7.8, and Momentum at 7.8; the weakest are Technical at 2.9, Peer rank at 4.6, and Quality at 4.6. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.63 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Industry Growth Leader
Trip ifRevenue growth falls below 15% year over year.
- P2Cheap Valuation Strong Margins
Trip ifForward P/E rises above 13x from current 8.9x.
- P3Earnings Beats With One Miss
Trip ifEPS surprise stays below 0% in the next 2 reported quarters.
- P4Analyst Target Exceeded
Trip ifPrice rises more than 15% above the analyst target without target revisions.
- P5Breakout With Volume Distribution
Trip ifPrice falls below the $36.52 stop level, more than 4.8% below $38.36.