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Arrow Financial
(NASDAQ:AROW)
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Rating:62Neutral
Price Target:
$41.00
▲(7.05% Upside)
Action:Reiterated
Date:09/10/26
The score is driven primarily by middling financial performance: strong cash flow is offset by contracting revenue, margin compression, and a sharp increase in leverage. Valuation is a clear positive with a modest P/E and ~3.1% dividend yield, while technical indicators point to neutral-to-weak momentum. Corporate events are modestly supportive due to strategic acquisitions, though near-term earnings pressure and credit provisioning temper the benefit.
Positive Factors
Strong cash generation
Strong operating and free cash flow provides internally generated funding for lending, technology, integration, and shareholder distributions. Free cash flow was about 87% of net income and rose 41.7%, indicating meaningful cash conversion and supporting financial resilience over the next several quarters.
Negative Factors
Revenue and margin contraction
The combination of lower trailing revenue and a materially weaker operating margin points to a more difficult earnings environment than in 2025. If this pressure persists, it could reduce internal capital available for growth, make performance less predictable, and limit the benefit of recent expansion initiatives.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Strong operating and free cash flow provides internally generated funding for lending, technology, integration, and shareholder distributions. Free cash flow was about 87% of net income and rose 41.7%, indicating meaningful cash conversion and supporting financial resilience over the next several quarters.
Read all positive factors
Arrow Financial (AROW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$673.89M
Dividend Yield3.27%
Average Volume (3M)78.28K
Price to Earnings (P/E)11.7
Beta (1Y)0.76
Revenue Growth8.43%
EPS Growth69.62%
CountryUS
Employees578
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)3.12
Shares Outstanding18,523,724
10 Day Avg. Volume74,751
30 Day Avg. Volume78,281
Financial Highlights & Ratios
PEG Ratio0.24
Price to Book (P/B)1.20
Price to Sales (P/S)2.14
P/FCF Ratio14.32
Enterprise Value/Market Cap1.45
Enterprise Value/Revenue4.62
Enterprise Value/Gross Profit7.26
Enterprise Value/Ebitda24.68
Forecast
1Y Price Target
$44.00Price Target Upside14.88% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)3.51
Revenue Forecast (FY)$206.28M
Arrow Financial Business Overview & Revenue Model
Company Description
Arrow Financial Corporation functions as a bank holding company, delivering a comprehensive suite of commercial and consumer banking services, alongside various financial products. Its core deposit offerings include conventional options like deman...
How the Company Makes Money
Arrow Financial primarily makes money through traditional banking activities. Its largest earnings driver is net interest income: it collects interest on loans and interest-earning assets (such as commercial and consumer loans and investment secur...
Arrow Financial Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
45
Neutral
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 211.85M | 242.58M | 223.07M | 191.68M | 160.55M | 147.92M |
| Gross Profit | 134.83M | 158.32M | 134.63M | 130.57M | 144.44M | 142.45M |
| EBITDA | 39.67M | 60.81M | 42.72M | 44.24M | 70.46M | 72.23M |
| Net Income | 51.28M | 43.95M | 29.71M | 30.07M | 48.80M | 49.86M |
Balance Sheet | ||||||
| Total Assets | 4.48B | 4.45B | 4.31B | 4.17B | 3.97B | 4.03B |
| Cash, Cash Equivalents and Short-Term Investments | 30.88M | 29.13M | 617.66M | 640.30M | 638.15M | 1.02B |
| Total Debt | 335.08M | 29.19M | 33.60M | 71.57M | 106.92M | 70.17M |
| Total Liabilities | 4.04B | 4.01B | 3.91B | 3.79B | 3.62B | 3.66B |
| Stockholders Equity | 446.31M | 431.85M | 400.90M | 379.77M | 353.54M | 371.19M |
Cash Flow | ||||||
| Free Cash Flow | 44.65M | 36.19M | 28.87M | 13.50M | 45.46M | 61.07M |
| Operating Cash Flow | 51.97M | 41.28M | 34.47M | 20.58M | 59.71M | 68.21M |
| Investing Cash Flow | -145.37M | -61.45M | -88.95M | -82.65M | -393.06M | -274.60M |
| Financing Cash Flow | 11.74M | 79.81M | 66.49M | 139.95M | -59.69M | 283.10M |
Arrow Financial Technical Analysis
Negative
38.30
Price Trends
38.35
Negative
38.64
Negative
36.12
Positive
Market Momentum
-0.47
Positive
37.22
Neutral
25.68
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AROW, the sentiment is Negative. The current price of 38.3 is above the 20-day moving average (MA) of 37.53, below the 50-day MA of 38.35, and above the 200-day MA of 36.12, indicating a neutral trend. The MACD of -0.47 indicates Positive momentum. The RSI at 37.22 is Neutral, neither overbought nor oversold. The STOCH value of 25.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AROW.
Arrow Financial Risk Analysis
Arrow Financial disclosed 25 risk factors in its most recent earnings report. Arrow Financial reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Arrow Financial Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $634.26M | 12.74 | 9.22% | 3.49% | 18.94% | 14.83% | |
74 Outperform | $912.52M | 14.89 | 9.62% | 2.87% | 6.50% | 28.40% | |
70 Outperform | $388.32M | 11.61 | 12.98% | 1.71% | 18.42% | 190.13% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
63 Neutral | $757.71M | 9.40 | 13.09% | 3.30% | 46.45% | ― | |
62 Neutral | $673.89M | 11.66 | 11.82% | 3.27% | 8.43% | 69.62% | |
62 Neutral | $432.24M | 24.86 | 5.22% | ― | 16.32% | -16.91% |
* Financial Sector Average
AROW
Arrow Financial
36.38
10.67
41.49%
BHB
Bar Harbor Bankshares
37.83
9.76
34.78%
FISI
Financial Institutions
38.45
12.73
49.52%
TRST
TrustCo Bank
53.59
19.19
55.77%
CHMG
Chemung Financial
80.54
31.19
63.21%
PBFS
Pioneer Bancorp
17.40
4.33
33.13%
Arrow Financial Corporate Events
Business Operations and StrategyM&A Transactions
Arrow Financial expands insurance footprint with Upstate acquisition
Positive
Sep 10, 2026
On September 10, 2026, Arrow Financial Corporation announced that its insurance subsidiary Upstate Agency, LLC has entered into a definitive agreement to acquire Skene Valley Agency, Inc., an independent insurance agency operating in Washington Co...
Business Operations and StrategyDividendsFinancial DisclosuresM&A Transactions
Arrow Financial Earnings Decline as Adirondack Acquisition Closes
Negative
Jul 23, 2026
Arrow Financial Corporation reported that for the three months ended June 30, 2026, net income declined sequentially to $11.0 million, or $0.66 per share, from $13.5 million, or $0.82 per share, in the first quarter, as higher provisions for credi...
Business Operations and StrategyExecutive/Board ChangesM&A Transactions
Arrow Financial Completes Adirondack Bancorp Acquisition and Merger
Positive
Jul 1, 2026
On July 1, 2026, Arrow Financial Corporation completed its previously announced acquisition of Adirondack Bancorp, Inc. and the merger of Adirondack Bank into Arrow Bank, creating a combined institution with about $5.4 billion in assets, $4.8 bill...
M&A TransactionsRegulatory Filings and ComplianceShareholder Meetings
Arrow Financial Advances Toward Closing Adirondack Bancorp Merger
Positive
Jun 11, 2026
Arrow Financial Corporation and Adirondack Bancorp, Inc., both New York-based banking companies, have moved closer to completing their previously announced merger, under which Adirondack will merge into Arrow and Adirondack Bank will be combined w...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.