ARM HOLDINGS PLC-ADR (NASDAQ:ARM): A Strong Growth Stock with Bullish Technical Momentum

Identifying strong growth stocks with good technical setups involves a two-part method, combining fundamental strength with technical momentum. The approach looks for companies showing solid earnings and revenue growth (fundamental factors) while also displaying positive price patterns or breakouts (technical factors). This helps find stocks with both strong business performance and short-term price movement, lowering risk while aiming for potential gains.

ARM HOLDINGS PLC-ADR (NASDAQ:ARM) fits these conditions. Below, we explain why the stock matches this strategy.

Fundamental Strength: Growth and Financial Health

ARM’s fundamental details, as seen in its fundamental analysis report, highlight key strengths:

• Growth Performance:

  • Revenue increased 23.94% year-over-year, with a three-year average growth rate of 14.02%.
  • Earnings per share (EPS) rose by 12.77% in the past year, with expected growth of 19.21% annually in the future.
  • The company’s growth score of 8/10 shows it performs better than many peers in the semiconductor sector.

• Profitability and Financial Stability:

  • ARM has high margins, including a 96.98% gross margin (among the best in its industry) and a 19.77% profit margin.
  • Its financial health score of 8/10 is backed by a strong balance sheet—no debt, a current ratio of 5.20, and good liquidity.

These fundamentals match the growth investing principles discussed in our introductory article, where a large market (semiconductor IP licensing) and strong margins are important for long-term growth.

Technical Momentum: Breakout Potential

ARM’s technical analysis report shows a positive setup:

• Trend Performance:

  • Both short-term and long-term trends are upward, with the stock trading above key moving averages (20-day, 50-day, 100-day, and 200-day SMAs).
  • The stock has done better than 89% of all stocks over the past year and 75% of semiconductor competitors.

• Testing Resistance Levels:

  • ARM is near a resistance zone between $163.92,$165.47, with a move above this level possibly indicating further gains.
  • Support levels are clear at $160.59,$162.52, providing a defined point for managing risk.

This setup suggests a possible entry if the stock breaks above resistance, with a stop-loss below support to limit losses.

Why This Pairing Works

Growth stocks with technical breakouts often see a positive cycle: strong fundamentals draw institutional interest, while breakouts attract momentum traders. ARM’s mix of:

• Growing margins in a fast-moving industry (semiconductor IP),
• A debt-free financial position, and
• An upward price trend

makes it an interesting choice for investors looking for growth with managed risk.

Find More Growth-Stock Opportunities

For other stocks filtered by similar criteria—strong growth, profitability, and technical breakouts—see our Strong Growth Stocks with Good Technical Setups screener.

Disclaimer: This analysis is not investment advice. Always do your own research and consider your risk tolerance before trading. Past performance does not guarantee future results.