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ZYBERNO

Stock Report

Updated Sep 1, 2026

ARROW FINANCIAL CORPORATION (AROW)

Financial Services • NASDAQ

$38.16

Professional Investment Analysis

ZYBERNO SCORE →

Is it a great business? Is it getting better?

33.0/100

WEAK BUSINESS

ARROW FINANCIAL CORPORATION (AROW) scores 33/100 — weak fundamentals with mixed indicators requiring careful analysis before acting.

📊 How is the Zyberno Score calculated? +

The Zyberno Score answers one question: "Is this a quality business worth owning?" It's a 0-100 investment grade that evaluates business fundamentals across four critical dimensions, based on principles from Warren Buffett, Benjamin Graham, Peter Lynch, and Charlie Munger.

The 4 Core Categories (25 points each):

1. PROFITABILITY (25 pts)

Metrics: ROE, ROIC, Net Margin, Operating Margin
Thresholds: ROE >20% excellent • ROIC >20% excellent • Net Margin >20% excellent • Operating Margin >25% excellent

2. FINANCIAL STRENGTH (25 pts)

Metrics: Debt-to-Equity, Current Ratio, Interest Coverage, Altman Z-Score
Thresholds: D/E <0.3 excellent • Current Ratio >2.5 excellent • Interest Coverage >10x excellent • Altman Z >3.0 safe

3. CASH FLOW QUALITY (25 pts)

Metrics: Free Cash Flow, OCF vs Net Income, FCF Margin
Thresholds: Positive & growing FCF excellent • OCF/NI >1.2x excellent (cash earnings exceed accounting)

4. GROWTH & CONSISTENCY (25 pts)

Metrics: Revenue Growth, Net Income Growth, FCF Growth, Piotroski F-Score
Thresholds: Growth via log-linear regression • Piotroski 8-9 excellent, 6-7 good

Score Interpretation:

75-100

GREAT BUSINESS

65-74

GOOD BUSINESS

50-64

AVERAGE BUSINESS

30-49

WEAK BUSINESS

0-29

POOR BUSINESS

→ View full AROW quality analysis & detailed breakdown

VALUATION SIGNAL

⚠

Business Model Limitation

ARROW FINANCIAL CORPORATION operates in the Banking industry. Owner Earnings-based DCF analysis — the foundation of both the Margin of Safety and the Brina Gap — is not well-suited to companies whose business model is structurally built around leverage: banks, insurers, mortgage companies, and REITs. These businesses are typically valued using sector-specific metrics such as Price-to-Book, Price-to-FFO, or Net Asset Value. Treat these signals as directional only.

MARGIN OF SAFETY

Is this stock cheap or expensive relative to what the business has historically generated for owners?

-99.4%

Overvalued

Growth gap unavailable — insufficient data for reverse DCF calculation.

🎯 Expected Annual Return →

-21.3%

5-year annualised assuming price converges to intrinsic value

💰 How is Margin of Safety calculated? +

Margin of Safety measures how much discount or premium you're paying relative to a stock's intrinsic value. It's Benjamin Graham's core principle: the larger the margin, the lower your downside risk.

Formula: (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100%

How We Calculate Intrinsic Value (DCF Method):

Step 1: Calculate current Owner Earnings (OCF − Maintenance CapEx)

Step 2: Calculate company-specific growth rate using log-linear regression on 16 quarters of Owner Earnings

Step 3: Project 10 years forward using the calculated growth rate

Step 4: Discount each year's cash flow to present value using 10% discount rate

Step 5: Calculate terminal value using 3% perpetual growth rate

Step 6: Sum all discounted cash flows = Intrinsic Value

What The Percentages Mean:

+50% or more

EXCELLENT — Very undervalued

+25% to +50%

GOOD — Attractive discount

0% to +25%

FAIR — Reasonable value

0% to -25%

CAUTION — Slight premium

-25% or worse

POOR — Overvalued

"Price is what you pay, value is what you get." — Warren Buffett

→ View full AROW valuation analysis · → View full AROW Brina Gap analysis

📈 How is Brina Gap calculated? +

Brina Gap measures the difference between the growth a business can fundamentally sustain and the growth the market is already pricing in.

Formula: Fundamental Growth Rate − Market-Implied Growth Rate

The Two Components:

Fundamental Growth Rate = ROIC × Reinvestment Rate

What the business can sustainably grow at based on how much it reinvests and what return it earns on that capital. Grounded in historical financials.

Market-Implied Growth Rate = Reverse DCF

The growth rate the current Enterprise Value implicitly assumes. Calculated by back-solving a 10-year DCF model (10% WACC, 3% terminal growth) until the present value of projected cash flows equals EV.

What The Gap Means:

Gap > +5% Market Underestimates — potential upside

+2% to +5% Slight Underestimate

-2% to +2% Fairly Priced — market consensus matches fundamentals

-5% to -2% Slight Overestimate

Gap < -5% Market Overestimates — price embeds optimism fundamentals don't support

A positive gap (market underestimates) combined with a positive Margin of Safety is the strongest combined signal — the business is both cheap historically and forward economics are stronger than the price suggests.

Critical Financial Health Indicators

Return on Equity (Profitability):AVERAGE (11.8%)

Debt-to-Equity (Solvency Risk):EXCELLENT (0.03x)

Operating Margin (Operational Efficiency):CRITICAL (0.0%)

Return on Capital (Capital Efficiency):CRITICAL (0.0%)

📊 Valuation Trilogy

Three interconnected metrics for complete valuation analysis

Click any metric for full methodology and detailed analysis

Zyberno's Verdict

ARROW FINANCIAL CORPORATION (AROW) stock report — Zyberno Score 33/100 (WEAK BUSINESS), Margin of Safety -99.4%, -21% expected annual return. Full financial analysis on Zyberno.

According to Zyberno's DCF model, ARROW FINANCIAL CORPORATION (AROW) trades at $38.16 against an estimated intrinsic value per share of $19.14 — a -99.4% Margin of Safety based on Owner Earnings of $41.98M TTM, projected at -9.7% growth for 10 years with a 2.5% terminal growth rate. Zyberno's model translates this into a 5-year expected return of -21.3% annually.

Over the trailing twelve months, AROW generated $41.98M in Owner Earnings. Capital was deployed as follows: $113.00K returned via share buybacks, $19.45M paid as dividends, $5.12M invested in capital expenditures. Owner Earnings have declined at 9.7% annually over the trailing five years using log-linear regression.

DIVISION I: EXECUTIVE SUMMARY

A. Market Valuation

Market Price & Capitalization (2)

Current Price:38.16

Market Cap:$626.89M

Valuation Multiples (4)

P/E Ratio:

12.31x

📊 Click to view full AROW P/E analysis →

P/B Ratio:1.40x

P/S Ratio:18.51x

Peg Ratio:0.18x

Enterprise Metrics (3)

Enterprise Value:$911.09M

Ev Ebitda Ratio:166.93x

Pfcf Ratio:15.17x

Price Action & Momentum (3)

12-1 Momentum:

+31.8% (85th pctile)

📈 Click to view full AROW Momentum analysis →

Momentum Percentile:85 / 100

% of 52-Week High:89.4%

B. Profitability Assessment

Return Metrics (2)

ROE:

11.8%

📊 Click to view full AROW ROE analysis →

ROA:1.1%

Margin Analysis (2)

Net Margin Ttm:151.4%

Ebitda Margin:16.1%

TTM Performance (1)

Net Margin Ttm:151.4%

Yield Metrics (3)

Earnings Yield:$8.12

Owner Earnings Yield:$6.70

Dividend Yield:3.1%

C. Log-Linear Regression Growth Trends

Earnings Surprise (SUE) (3)

Earnings Surprise (SUE):

+0.02

📊 Click to view full AROW Earnings Surprise analysis →

EPS Surprise vs Expected:1.0%

Latest Earnings Filed:2026-08-06

Revenue Growth (Linear) (1)

Revenue Growth Rate (Linear):3.4%

Earnings Growth (Linear) (1)

Net Income Growth Rate (Linear):7.2%

Cash Flow Growth (Linear) (2)

Free Cash Flow Growth Rate (Linear):-6.2%

Operating Cash Flow Growth Rate (Linear):-9.9%

D. Financial Stability

Liquidity Ratios (3)

Current Ratio:0.01x

Quick Ratio:0.01x

Cash Ratio:0.01x

Leverage Analysis (3)

Debt To Equity Ttm:0.03x

Debt-to-Equity Ratio:0.03x

Debt To Ebitda:57.73x

Coverage Ratios (2)

Interest Coverage Ratio:0.00x

Times Interest Earned:0.00

Capital Structure (4)

Working Capital:-3,624,324,000.00

Cash And Cash Equivalents:30,881,000.00

Long Term Debt:$4.89M

Net Debt:$284.20M

DIVISION II: FINANCIAL STATEMENTS ANALYSIS

A. Income Statement Analysis

Revenue Components (2)

Revenue TTM: $33.87M

Linear Growth: 3.4%

📊 Click to view full AROW Revenue analysis & methodology →

Cost Of Revenue Ttm:$0.00

Profitability Breakdown (2)

$0.00$0.00

Bottom Line Performance (3)

Net income TTM: $51.29M

Linear Growth: 7.2%

📊 Click to view full AROW Net Income analysis & methodology →

Income Before Tax:$0.00

Ebitda Ttm:5,458,000.00

Operating Expenses (5)

Operating Expenses:105,566,000.00

R And D Expense:0.00

Sga Expense:0.00

Income Tax Expense:$13.32M

Interest Expense:74,284,000.00

Expense Ratios (3)

R And D To Revenue Percentage:0.0%

Sga To Revenue Percentage:0.0%

Ebitda Margin:16.1%

B. Balance Sheet Analysis

Asset Composition (5)

Total Assets:$4.48B

Current Assets:$30.88M

Ppe Net:41,403,000.00

Goodwill:23,789,000.00

Intangible Assets:$1.61M

Liability Structure (4)

Total Liabilities:4,036,053,000.00

Current Liabilities:3,655,205,000.00

Long Term Debt:$4.89M

Short Term Debt:$310.19M

Equity & Capital (3)

Equity:$446.31M

Retained Earnings:$116.81M

Common Stock:22,067,000.00

Working Capital Items (3)

Accounts Receivable:0.00

Inventory:0.00

Accounts Payable:0.00

Special Items (2)

Contract Liabilities:0.00

Stock Based Compensation:228,000.00

C. Cash Flow Analysis

Operating Activities (2)

Operating cash flow TTM: $46.45M

Linear Growth: -9.9%

Free cash flow TTM: $41.34M

Linear Growth: -6.2%

📊 Click to view full AROW Free Cash Flow analysis & methodology →

Investment Activities (2)

Investing Cash Flow:-$15.11M

Capital Expenditures Ttm:5,117,000.00

Financing Activities (3)

Financing Cash Flow:$71.29M

Dividends Paid Ttm:19,449,000.00

Stock Repurchase:113,000.00

Capital Transactions (3)

Common Stock Issuance:0.00

Long Term Debt Issuance:$0.00

Long Term Debt Repayments:$0.00

Non-Cash Items (1)

Depreciation Amortization Ttm:5,458,000.00

DIVISION III: OPERATIONAL METRICS

A. Per Share Analysis

Earnings Per Share (3)

EPS (Basic TTM):3.10

Eps diluted TTM: $3.10

Linear Growth: 8.1%

📊 Click to view full AROW EPS analysis & methodology →

Earnings Per Share Ttm:$3.12

Revenue & Cash Per Share (3)

Sales Per Share Ttm:2.06

Operating Cash Flow Per Share:$2.51

Fcf Per Share Ttm:2.52

Book Value & Capital (2)

Book Value Per Share:$27.17

Cash Per Share:1.88

Dividend Policy (1)

Dividend Payout Ratio:37.42x

B. Operational Efficiency

Asset Utilization (2)

Asset Turnover Ttm:0.01x

Working Capital Turnover Ttm:-999.00x

Receivables Management (2)

Receivables Turnover Ttm:-999.00x

Days Sales Outstanding Ttm:-999.00

Inventory Management (2)

Inventory Turnover Ttm:-999.00x

Days Inventory Outstanding Ttm:-999.00

Payables & Cash Cycle (2)

Days Payable Outstanding:-999.00

Cash Conversion Cycle:-999.00

C. Quality & Risk Metrics

Financial Quality Scores (2)

Financial Strength Score:60.00

Quality Score:75.00

Market Metrics (2)

Beta:0.00x

Volatility Category:unknown

DIVISION IV: INVESTMENT ANALYSIS

A. Value Investment Framework

Owner Earnings Analysis (3)

Owner earnings TTM: $41.98M

Linear Growth: -9.7%

📊 Click to view full AROW Owner Earnings analysis & methodology →

Owner Earnings Per Share:$2.56

Owner Earnings Yield:$6.70

Growth Assessment (1)

Owner Earnings Growth Rate:-$9.70

Intrinsic Value Models (1)

Intrinsic Value:

$314.44M

📊 Click to view full AROW DCF valuation →

Margin of Safety (1)

Margin Of Safety:

-99.4%

📊 Click to view full AROW valuation analysis →

Return Scenarios (1)

Theoretical 5-Year Return:

-21.3%

📊 Click to view full AROW expected return analysis →

Investment Assessment (1)

Buffett Assessment:Overvalued

B. Log-Linear Regression Growth Analysis

Growth Rates (Log-Linear Regression) (2)

Revenue Growth Rate (Linear):3.4%

Net Income Growth Rate (Linear):7.2%

Cash Flow Growth Rates (2)

Free Cash Flow Growth Rate (Linear):-6.2%

Operating Cash Flow Growth Rate (Linear):-9.9%

Other Growth Rates (2)

Book Value Growth Rate (Linear):6.0%

Owner Earnings Growth Rate:-$9.70

C. Company Profile & Context

Corporate Information (6)

Symbol:AROW

Company Name:ARROW FINANCIAL CORPORATION

Sector:Financial Services

Industry:Banking

Exchange:NASDAQ

Country:United States

Market Classification (3)

Market Cap Category:N/A

Price Category:medium

Volume Category:N/A

Share Structure (3)

Shares Outstanding:16.43M

Shares Outstanding Basic:16.43M

Shares Outstanding Diluted:16.47M

Data Processing Info (3)

Processing Version:v3.0

Last Updated:2026-09-01 17:34:35 UTC

Data Timestamp:2026-09-01T17:34:35.515855