ARM HOLDINGS PLC-ADR (ARM) Fundamental Analysis & Valuation

NASDAQ:ARM • US0420682058

Current stock price

136.89 USD
+4.54 (+3.43%)
At close:
137.026 USD
+0.14 (+0.1%)
After Hours:

This ARM fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

7

1. ARM Profitability Analysis

1.1 Basic Checks

  • ARM had positive earnings in the past year.
  • ARM had a positive operating cash flow in the past year.
  • Each year in the past 5 years ARM has been profitable.
  • In the past 5 years ARM always reported a positive cash flow from operatings.
ARM Yearly Net Income VS EBIT VS OCF VS FCFARM Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2021 2022 2023 2024 2025 200M 400M 600M 800M 1B

1.2 Ratios

  • ARM has a better Return On Assets (7.87%) than 77.39% of its industry peers.
  • Looking at the Return On Equity, with a value of 10.27%, ARM is in the better half of the industry, outperforming 72.17% of the companies in the same industry.
  • Looking at the Return On Invested Capital, with a value of 7.61%, ARM is in the better half of the industry, outperforming 75.65% of the companies in the same industry.
  • ARM had an Average Return On Invested Capital over the past 3 years of 6.46%. This is below the industry average of 10.70%.
  • The 3 year average ROIC (6.46%) for ARM is below the current ROIC(7.61%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 7.87%
ROE 10.27%
ROIC 7.61%
ROA(3y)6.79%
ROA(5y)N/A
ROE(3y)10.1%
ROE(5y)N/A
ROIC(3y)6.46%
ROIC(5y)N/A
ARM Yearly ROA, ROE, ROICARM Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2021 2022 2023 2024 2025 5 10 15

1.3 Margins

  • ARM's Profit Margin of 17.15% is fine compared to the rest of the industry. ARM outperforms 79.13% of its industry peers.
  • ARM's Profit Margin has been stable in the last couple of years.
  • ARM's Operating Margin of 18.80% is fine compared to the rest of the industry. ARM outperforms 77.39% of its industry peers.
  • In the last couple of years the Operating Margin of ARM has declined.
  • ARM has a Gross Margin of 97.50%. This is amongst the best in the industry. ARM outperforms 99.13% of its industry peers.
  • In the last couple of years the Gross Margin of ARM has remained more or less at the same level.
Industry RankSector Rank
OM 18.8%
PM (TTM) 17.15%
GM 97.5%
OM growth 3Y-6.24%
OM growth 5YN/A
PM growth 3Y-0.9%
PM growth 5YN/A
GM growth 3Y0.64%
GM growth 5YN/A
ARM Yearly Profit, Operating, Gross MarginsARM Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2021 2022 2023 2024 2025 20 40 60 80

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7

2. ARM Health Analysis

2.1 Basic Checks

  • ARM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
  • ARM has more shares outstanding than it did 1 year ago.
  • The debt/assets ratio for ARM is higher compared to a year ago.
ARM Yearly Shares OutstandingARM Yearly Shares OutstandingYearly Shares Outstanding 2022 2023 2024 2025 200M 400M 600M 800M 1B
ARM Yearly Total Debt VS Total AssetsARM Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2022 2023 2024 2025 2B 4B 6B 8B

2.2 Solvency

  • An Altman-Z score of 37.24 indicates that ARM is not in any danger for bankruptcy at the moment.
  • With an excellent Altman-Z score value of 37.24, ARM belongs to the best of the industry, outperforming 91.30% of the companies in the same industry.
  • There is no outstanding debt for ARM. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
Industry RankSector Rank
Debt/Equity 0
Debt/FCF 0.03
Altman-Z 37.24
ROIC/WACC0.59
WACC12.96%
ARM Yearly LT Debt VS Equity VS FCFARM Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2021 2022 2023 2024 2025 2B 4B 6B

2.3 Liquidity

  • ARM has a Current Ratio of 5.43. This indicates that ARM is financially healthy and has no problem in meeting its short term obligations.
  • With a decent Current ratio value of 5.43, ARM is doing good in the industry, outperforming 76.52% of the companies in the same industry.
  • A Quick Ratio of 5.43 indicates that ARM has no problem at all paying its short term obligations.
  • ARM has a better Quick ratio (5.43) than 79.13% of its industry peers.
Industry RankSector Rank
Current Ratio 5.43
Quick Ratio 5.43
ARM Yearly Current Assets VS Current LiabilitesARM Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2022 2023 2024 2025 1B 2B 3B 4B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

9

3. ARM Growth Analysis

3.1 Past

  • ARM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 18.62%, which is quite good.
  • Measured over the past years, ARM shows a quite strong growth in Earnings Per Share. The EPS has been growing by 12.27% on average per year.
  • Looking at the last year, ARM shows a very strong growth in Revenue. The Revenue has grown by 26.45%.
  • The Revenue has been growing by 14.02% on average over the past years. This is quite good.
EPS 1Y (TTM)18.62%
EPS 3Y12.27%
EPS 5YN/A
EPS Q2Q%10.26%
Revenue 1Y (TTM)26.45%
Revenue growth 3Y14.02%
Revenue growth 5YN/A
Sales Q2Q%26.35%

3.2 Future

  • Based on estimates for the next years, ARM will show a very strong growth in Earnings Per Share. The EPS will grow by 22.43% on average per year.
  • The Revenue is expected to grow by 22.11% on average over the next years. This is a very strong growth
EPS Next Y7.6%
EPS Next 2Y14.92%
EPS Next 3Y20.5%
EPS Next 5Y22.43%
Revenue Next Year22.53%
Revenue Next 2Y21.56%
Revenue Next 3Y21.13%
Revenue Next 5Y22.11%

3.3 Evolution

  • The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
  • When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
ARM Yearly Revenue VS EstimatesARM Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 5B 10B 15B
ARM Yearly EPS VS EstimatesARM Yearly EPS VS EstimatesYearly EPS VS Estimates 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2 4 6

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Find the best growth stocksShow best growing peers

2

4. ARM Valuation Analysis

4.1 Price/Earnings Ratio

  • Based on the Price/Earnings ratio of 79.59, the valuation of ARM can be described as expensive.
  • ARM's Price/Earnings is on the same level as the industry average.
  • The average S&P500 Price/Earnings ratio is at 25.23. ARM is valued rather expensively when compared to this.
  • A Price/Forward Earnings ratio of 63.21 indicates a quite expensive valuation of ARM.
  • ARM's Price/Forward Earnings is on the same level as the industry average.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 22.42, ARM is valued quite expensively.
Industry RankSector Rank
PE 79.59
Fwd PE 63.21
ARM Price Earnings VS Forward Price EarningsARM Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80

4.2 Price Multiples

  • Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ARM is on the same level as its industry peers.
  • The rest of the industry has a similar Price/Free Cash Flow ratio as ARM.
Industry RankSector Rank
P/FCF 151.2
EV/EBITDA 123.02
ARM Per share dataARM EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 2 4 6

4.3 Compensation for Growth

  • The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
  • The decent profitability rating of ARM may justify a higher PE ratio.
  • ARM's earnings are expected to grow with 20.50% in the coming years. This may justify a more expensive valuation.
PEG (NY)10.48
PEG (5Y)N/A
EPS Next 2Y14.92%
EPS Next 3Y20.5%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

0

5. ARM Dividend Analysis

5.1 Amount

  • No dividends for ARM!.
Industry RankSector Rank
Dividend Yield 0%

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Find the best dividend stocksShow peers with best dividend

ARM Fundamentals: All Metrics, Ratios and Statistics

ARM HOLDINGS PLC-ADR

NASDAQ:ARM (3/23/2026, 6:19:08 PM)

After market: 137.026 +0.14 (+0.1%)

136.89

+4.54 (+3.43%)

Chartmill FA Rating
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)02-04
Earnings (Next)05-06
Inst Owners8.04%
Inst Owner Change7.02%
Ins Owners0.04%
Ins Owner Change0%
Market Cap145.00B
Revenue(TTM)4.67B
Net Income(TTM)801.00M
Analysts73.18
Price Target147.93 (8.06%)
Short Float %10.73%
Short Ratio2.46
Dividend
Industry RankSector Rank
Dividend Yield 0%
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.12%
Min EPS beat(2)4.57%
Max EPS beat(2)15.67%
EPS beat(4)3
Avg EPS beat(4)5.56%
Min EPS beat(4)-1.76%
Max EPS beat(4)15.67%
EPS beat(8)7
Avg EPS beat(8)10.45%
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)2
Avg Revenue beat(2)3.22%
Min Revenue beat(2)0.57%
Max Revenue beat(2)5.88%
Revenue beat(4)2
Avg Revenue beat(4)1.22%
Min Revenue beat(4)-1.31%
Max Revenue beat(4)5.88%
Revenue beat(8)6
Avg Revenue beat(8)2.36%
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-6.73%
PT rev (3m)-12.91%
EPS NQ rev (1m)0.06%
EPS NQ rev (3m)1.86%
EPS NY rev (1m)2.25%
EPS NY rev (3m)0.32%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.99%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)0.39%
Valuation
Industry RankSector Rank
PE 79.59
Fwd PE 63.21
P/S 31.04
P/FCF 151.2
P/OCF 95.27
P/B 18.59
P/tB 24.44
EV/EBITDA 123.02
EPS(TTM)1.72
EY1.26%
EPS(NY)2.17
Fwd EY1.58%
FCF(TTM)0.91
FCFY0.66%
OCF(TTM)1.44
OCFY1.05%
SpS4.41
BVpS7.36
TBVpS5.6
PEG (NY)10.48
PEG (5Y)N/A
Graham Number16.88
Profitability
Industry RankSector Rank
ROA 7.87%
ROE 10.27%
ROCE 9.63%
ROIC 7.61%
ROICexc 12.44%
ROICexgc 18.69%
OM 18.8%
PM (TTM) 17.15%
GM 97.5%
FCFM 20.53%
ROA(3y)6.79%
ROA(5y)N/A
ROE(3y)10.1%
ROE(5y)N/A
ROIC(3y)6.46%
ROIC(5y)N/A
ROICexc(3y)10.54%
ROICexc(5y)N/A
ROICexgc(3y)19.88%
ROICexgc(5y)N/A
ROCE(3y)8.18%
ROCE(5y)N/A
ROICexgc growth 3Y-16.23%
ROICexgc growth 5YN/A
ROICexc growth 3Y-6.35%
ROICexc growth 5YN/A
OM growth 3Y-6.24%
OM growth 5YN/A
PM growth 3Y-0.9%
PM growth 5YN/A
GM growth 3Y0.64%
GM growth 5YN/A
F-Score7
Asset Turnover0.46
Health
Industry RankSector Rank
Debt/Equity 0
Debt/FCF 0.03
Debt/EBITDA 0
Cap/Depr 248.02%
Cap/Sales 12.05%
Interest Coverage 250
Cash Conversion 137.74%
Profit Quality 119.73%
Current Ratio 5.43
Quick Ratio 5.43
Altman-Z 37.24
F-Score7
WACC12.96%
ROIC/WACC0.59
Cap/Depr(3y)91.19%
Cap/Depr(5y)79.24%
Cap/Sales(3y)4.62%
Cap/Sales(5y)4.95%
Profit Quality(3y)150.9%
Profit Quality(5y)159.55%
High Growth Momentum
Growth
EPS 1Y (TTM)18.62%
EPS 3Y12.27%
EPS 5YN/A
EPS Q2Q%10.26%
EPS Next Y7.6%
EPS Next 2Y14.92%
EPS Next 3Y20.5%
EPS Next 5Y22.43%
Revenue 1Y (TTM)26.45%
Revenue growth 3Y14.02%
Revenue growth 5YN/A
Sales Q2Q%26.35%
Revenue Next Year22.53%
Revenue Next 2Y21.56%
Revenue Next 3Y21.13%
Revenue Next 5Y22.11%
EBIT growth 1Y98.19%
EBIT growth 3Y6.91%
EBIT growth 5YN/A
EBIT Next Year25.81%
EBIT Next 3Y26.03%
EBIT Next 5Y26.7%
FCF growth 1Y-83.32%
FCF growth 3Y-25.56%
FCF growth 5YN/A
OCF growth 1Y-63.58%
OCF growth 3Y-4.65%
OCF growth 5YN/A

ARM HOLDINGS PLC-ADR / ARM Fundamental Analysis FAQ

What is the fundamental rating for ARM stock?

ChartMill assigns a fundamental rating of 6 / 10 to ARM.


What is the valuation status for ARM stock?

ChartMill assigns a valuation rating of 2 / 10 to ARM HOLDINGS PLC-ADR (ARM). This can be considered as Overvalued.


Can you provide the profitability details for ARM HOLDINGS PLC-ADR?

ARM HOLDINGS PLC-ADR (ARM) has a profitability rating of 7 / 10.


Can you provide the financial health for ARM stock?

The financial health rating of ARM HOLDINGS PLC-ADR (ARM) is 7 / 10.