ARM HOLDINGS PLC-ADR (ARM) Stock Fundamental Analysis
NASDAQ:ARM - Nasdaq - US0420682058 - ADR - Currency: USD
Overall ARM gets a fundamental rating of 5 out of 10. We evaluated ARM against 110 industry peers in the Semiconductors & Semiconductor Equipment industry. ARM is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. ARM is valued quite expensive, but it does show an excellent growth.
1. Profitability
1.1 Basic Checks
In the past year ARM was profitable.
ARM had a positive operating cash flow in the past year.
1.2 Ratios
With a decent Return On Assets value of 9.49%, ARM is doing good in the industry, outperforming 79.09% of the companies in the same industry.
Looking at the Return On Equity, with a value of 12.56%, ARM is in the better half of the industry, outperforming 74.55% of the companies in the same industry.
ARM has a Return On Invested Capital of 4.54%. This is in the better half of the industry: ARM outperforms 63.64% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ARM is below the industry average of 11.32%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.49% | ||
| ROE | 12.56% | ||
| ROIC | 4.54% |
ROA(3y)6.64%
ROA(5y)N/A
ROE(3y)11.4%
ROE(5y)N/A
ROIC(3y)7.14%
ROIC(5y)N/A
1.3 Margins
ARM has a better Profit Margin (21.82%) than 83.64% of its industry peers.
In the last couple of years the Profit Margin of ARM has declined.
ARM has a Operating Margin of 11.99%. This is in the better half of the industry: ARM outperforms 67.27% of its industry peers.
In the last couple of years the Operating Margin of ARM has declined.
The Gross Margin of ARM (96.37%) is better than 100.00% of its industry peers.
ARM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.99% | ||
| PM (TTM) | 21.82% | ||
| GM | 96.37% |
OM growth 3Y-32.83%
OM growth 5YN/A
PM growth 3Y-20.92%
PM growth 5YN/A
GM growth 3Y0.85%
GM growth 5YN/A
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ARM is destroying value.
Compared to 1 year ago, ARM has more shares outstanding
Compared to 1 year ago, ARM has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 39.07 indicates that ARM is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 39.07, ARM belongs to the best of the industry, outperforming 95.45% of the companies in the same industry.
ARM has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Altman-Z | 39.07 |
ROIC/WACC0.38
WACC12.07%
2.3 Liquidity
A Current Ratio of 4.96 indicates that ARM has no problem at all paying its short term obligations.
ARM's Current ratio of 4.96 is fine compared to the rest of the industry. ARM outperforms 71.82% of its industry peers.
A Quick Ratio of 4.96 indicates that ARM has no problem at all paying its short term obligations.
With an excellent Quick ratio value of 4.96, ARM belongs to the best of the industry, outperforming 83.64% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.96 | ||
| Quick Ratio | 4.96 |
3. Growth
3.1 Past
ARM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 31.39%, which is quite impressive.
ARM shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.80% yearly.
The Revenue for ARM has decreased by -25.88% in the past year. This is quite bad
ARM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.84% yearly.
EPS 1Y (TTM)31.39%
EPS 3Y-7.8%
EPS 5YN/A
EPS Q2Q%34.48%
Revenue 1Y (TTM)-25.88%
Revenue growth 3Y16.84%
Revenue growth 5YN/A
Sales Q2Q%19.3%
3.2 Future
The Earnings Per Share is expected to grow by 23.50% on average over the next years. This is a very strong growth
ARM is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 21.21% yearly.
EPS Next Y34.77%
EPS Next 2Y30.43%
EPS Next 3Y30.09%
EPS Next 5Y23.5%
Revenue Next Year25.5%
Revenue Next 2Y24.31%
Revenue Next 3Y23.49%
Revenue Next 5Y21.21%
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.
4. Valuation
4.1 Price/Earnings Ratio
ARM is valuated quite expensively with a Price/Earnings ratio of 85.01.
Compared to the rest of the industry, the Price/Earnings ratio of ARM is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 28.22. ARM is valued rather expensively when compared to this.
Based on the Price/Forward Earnings ratio of 59.93, the valuation of ARM can be described as expensive.
Based on the Price/Forward Earnings ratio, ARM is valued a bit more expensive than the industry average as 61.82% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.86, ARM is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 85.01 | ||
| Fwd PE | 59.93 |
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.
ARM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 206.96 | ||
| EV/EBITDA | 205.3 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
A more expensive valuation may be justified as ARM's earnings are expected to grow with 30.09% in the coming years.
PEG (NY)2.45
PEG (5Y)N/A
EPS Next 2Y30.43%
EPS Next 3Y30.09%
5. Dividend
5.1 Amount
No dividends for ARM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
123.27
+7.87 (+6.82%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners6.69%
Inst Owner Change0.09%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap129.56B
Analysts72.86
Price Target158.22 (28.35%)
Short Float %12.66%
Short Ratio3.16
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
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)14.77%
Min EPS beat(2)13.54%
Max EPS beat(2)16.01%
EPS beat(4)4
Avg EPS beat(4)15.35%
Min EPS beat(4)13.54%
Max EPS beat(4)16.95%
EPS beat(8)N/A
Avg EPS beat(8)N/A
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)3.09%
Min Revenue beat(2)2.8%
Max Revenue beat(2)3.37%
Revenue beat(4)4
Avg Revenue beat(4)3.5%
Min Revenue beat(4)2.8%
Max Revenue beat(4)4.94%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
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)-4.18%
PT rev (3m)3.71%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.65%
EPS NY rev (1m)0%
EPS NY rev (3m)1.56%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.14%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 85.01 | ||
| Fwd PE | 59.93 | ||
| P/S | 35.07 | ||
| P/FCF | 206.96 | ||
| P/OCF | 160.74 | ||
| P/B | 20.18 | ||
| P/tB | 27.93 | ||
| EV/EBITDA | 205.3 |
EPS(TTM)1.45
EY1.18%
EPS(NY)2.06
Fwd EY1.67%
FCF(TTM)0.6
FCFY0.48%
OCF(TTM)0.77
OCFY0.62%
SpS3.51
BVpS6.11
TBVpS4.41
PEG (NY)2.45
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.49% | ||
| ROE | 12.56% | ||
| ROCE | 5.81% | ||
| ROIC | 4.54% | ||
| ROICexc | 6.99% | ||
| ROICexgc | 10.91% | ||
| OM | 11.99% | ||
| PM (TTM) | 21.82% | ||
| GM | 96.37% | ||
| FCFM | 16.95% |
ROA(3y)6.64%
ROA(5y)N/A
ROE(3y)11.4%
ROE(5y)N/A
ROIC(3y)7.14%
ROIC(5y)N/A
ROICexc(3y)11.32%
ROICexc(5y)N/A
ROICexgc(3y)24.1%
ROICexgc(5y)N/A
ROCE(3y)9.15%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y-32.83%
OM growth 5YN/A
PM growth 3Y-20.92%
PM growth 5YN/A
GM growth 3Y0.85%
GM growth 5YN/A
F-Score6
Asset Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 104.65% | ||
| Cap/Sales | 4.87% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 131.06% | ||
| Profit Quality | 77.67% | ||
| Current Ratio | 4.96 | ||
| Quick Ratio | 4.96 | ||
| Altman-Z | 39.07 |
F-Score6
WACC12.07%
ROIC/WACC0.38
Cap/Depr(3y)61.17%
Cap/Depr(5y)N/A
Cap/Sales(3y)3.56%
Cap/Sales(5y)N/A
Profit Quality(3y)167.51%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)31.39%
EPS 3Y-7.8%
EPS 5YN/A
EPS Q2Q%34.48%
EPS Next Y34.77%
EPS Next 2Y30.43%
EPS Next 3Y30.09%
EPS Next 5Y23.5%
Revenue 1Y (TTM)-25.88%
Revenue growth 3Y16.84%
Revenue growth 5YN/A
Sales Q2Q%19.3%
Revenue Next Year25.5%
Revenue Next 2Y24.31%
Revenue Next 3Y23.49%
Revenue Next 5Y21.21%
EBIT growth 1Y-42.69%
EBIT growth 3Y-21.51%
EBIT growth 5YN/A
EBIT Next Year50.41%
EBIT Next 3Y36.4%
EBIT Next 5Y33.8%
FCF growth 1Y46.59%
FCF growth 3Y-3.93%
FCF growth 5YN/A
OCF growth 1Y47.5%
OCF growth 3Y-4.03%
OCF growth 5YN/A