ARM HOLDINGS PLC-ADR (ARM) Stock Fundamental Analysis
USA - NASDAQ:ARM - US0420682058 - ADR
169.82 USD
+4.37 (+2.64%)
170.21 USD
+0.39 (+0.23%)
Overall ARM gets a fundamental rating of 6 out of 10. We evaluated ARM against 112 industry peers in the Semiconductors & Semiconductor Equipment industry. Both the health and profitability get an excellent rating, making ARM a very profitable company, without any liquidiy or solvency issues. ARM is valued quite expensive, but it does show an excellent growth. These ratings could make ARM a good candidate for growth and quality investing.
1. Profitability
1.1 Basic Checks
In the past year ARM was profitable.
In the past year ARM had a positive cash flow from operations.
ARM had positive earnings in each of the past 5 years.
In the past 5 years ARM always reported a positive cash flow from operatings.
1.2 Ratios
ARM has a better Return On Assets (7.44%) than 75.89% of its industry peers.
The Return On Equity of ARM (9.98%) is better than 73.21% of its industry peers.
With a decent Return On Invested Capital value of 7.21%, ARM is doing good in the industry, outperforming 72.32% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ARM is below the industry average of 11.03%.
The 3 year average ROIC (6.46%) for ARM is below the current ROIC(7.21%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.44% | ||
| ROE | 9.98% | ||
| ROIC | 7.21% |
ROA(3y)6.79%
ROA(5y)N/A
ROE(3y)10.1%
ROE(5y)N/A
ROIC(3y)6.46%
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 16.96%, ARM is in the better half of the industry, outperforming 77.68% of the companies in the same industry.
ARM's Profit Margin has been stable in the last couple of years.
ARM's Operating Margin of 18.51% is fine compared to the rest of the industry. ARM outperforms 77.68% of its industry peers.
In the last couple of years the Operating Margin of ARM has declined.
Looking at the Gross Margin, with a value of 97.14%, ARM belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Gross Margin of ARM has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.51% | ||
| PM (TTM) | 16.96% | ||
| GM | 97.14% |
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
2. Health
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.
Compared to 1 year ago, ARM has more shares outstanding
ARM has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 45.82 indicates that ARM is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 45.82, ARM belongs to the top of the industry, outperforming 93.75% 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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.03 | ||
| Altman-Z | 45.82 |
ROIC/WACC0.6
WACC12.02%
2.3 Liquidity
ARM has a Current Ratio of 4.99. This indicates that ARM is financially healthy and has no problem in meeting its short term obligations.
ARM has a Current ratio of 4.99. This is in the better half of the industry: ARM outperforms 71.43% of its industry peers.
A Quick Ratio of 4.99 indicates that ARM has no problem at all paying its short term obligations.
ARM's Quick ratio of 4.99 is amongst the best of the industry. ARM outperforms 81.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.99 | ||
| Quick Ratio | 4.99 |
3. Growth
3.1 Past
ARM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.77%, 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.
The Revenue has grown by 17.84% in the past year. This is quite good.
Measured over the past years, ARM shows a quite strong growth in Revenue. The Revenue has been growing by 14.02% on average per year.
EPS 1Y (TTM)12.77%
EPS 3Y12.27%
EPS 5YN/A
EPS Q2Q%-12.5%
Revenue 1Y (TTM)17.84%
Revenue growth 3Y14.02%
Revenue growth 5YN/A
Sales Q2Q%12.14%
3.2 Future
The Earnings Per Share is expected to grow by 19.58% on average over the next years. This is quite good.
Based on estimates for the next years, ARM will show a very strong growth in Revenue. The Revenue will grow by 23.75% on average per year.
EPS Next Y4.8%
EPS Next 2Y18.33%
EPS Next 3Y20.67%
EPS Next 5Y19.58%
Revenue Next Year19.19%
Revenue Next 2Y20.34%
Revenue Next 3Y19.58%
Revenue Next 5Y23.75%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
With a Price/Earnings ratio of 106.81, ARM can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as ARM.
The average S&P500 Price/Earnings ratio is at 26.10. ARM is valued rather expensively when compared to this.
With a Price/Forward Earnings ratio of 73.96, ARM can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ARM is on the same level as its industry peers.
ARM is valuated expensively when we compare the Price/Forward Earnings ratio to 22.52, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 106.81 | ||
| Fwd PE | 73.96 |
4.2 Price Multiples
ARM's Enterprise Value to EBITDA ratio is in line with the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as ARM.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 273.8 | ||
| EV/EBITDA | 178.01 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
ARM has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as ARM's earnings are expected to grow with 20.67% in the coming years.
PEG (NY)22.27
PEG (5Y)N/A
EPS Next 2Y18.33%
EPS Next 3Y20.67%
5. Dividend
5.1 Amount
ARM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
169.82
+4.37 (+2.64%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners8.62%
Inst Owner Change0.2%
Ins Owners0.04%
Ins Owner ChangeN/A
Market Cap179.88B
Revenue(TTM)4.12B
Net Income(TTM)699.00M
Analysts74.87
Price Target154.47 (-9.04%)
Short Float %10.66%
Short Ratio2.94
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)1
Avg EPS beat(2)0.99%
Min EPS beat(2)-1.76%
Max EPS beat(2)3.74%
EPS beat(4)3
Avg EPS beat(4)7.88%
Min EPS beat(4)-1.76%
Max EPS beat(4)16.01%
EPS beat(8)7
Avg EPS beat(8)14.75%
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)0
Avg Revenue beat(2)-0.78%
Min Revenue beat(2)-1.31%
Max Revenue beat(2)-0.24%
Revenue beat(4)2
Avg Revenue beat(4)1.16%
Min Revenue beat(4)-1.31%
Max Revenue beat(4)3.37%
Revenue beat(8)6
Avg Revenue beat(8)3.35%
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)0.12%
PT rev (3m)11.07%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-5.99%
EPS NY rev (1m)0.02%
EPS NY rev (3m)-5.07%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.37%
Revenue NY rev (1m)-0.17%
Revenue NY rev (3m)0.42%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 106.81 | ||
| Fwd PE | 73.96 | ||
| P/S | 43.65 | ||
| P/FCF | 273.8 | ||
| P/OCF | 176.53 | ||
| P/B | 25.67 | ||
| P/tB | 35.15 | ||
| EV/EBITDA | 178.01 |
EPS(TTM)1.59
EY0.94%
EPS(NY)2.3
Fwd EY1.35%
FCF(TTM)0.62
FCFY0.37%
OCF(TTM)0.96
OCFY0.57%
SpS3.89
BVpS6.61
TBVpS4.83
PEG (NY)22.27
PEG (5Y)N/A
Graham Number15.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.44% | ||
| ROE | 9.98% | ||
| ROCE | 9.13% | ||
| ROIC | 7.21% | ||
| ROICexc | 11.06% | ||
| ROICexgc | 16.92% | ||
| OM | 18.51% | ||
| PM (TTM) | 16.96% | ||
| GM | 97.14% | ||
| FCFM | 15.94% |
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 Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.03 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 181% | ||
| Cap/Sales | 8.78% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 105.82% | ||
| Profit Quality | 93.99% | ||
| Current Ratio | 4.99 | ||
| Quick Ratio | 4.99 | ||
| Altman-Z | 45.82 |
F-Score7
WACC12.02%
ROIC/WACC0.6
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)12.77%
EPS 3Y12.27%
EPS 5YN/A
EPS Q2Q%-12.5%
EPS Next Y4.8%
EPS Next 2Y18.33%
EPS Next 3Y20.67%
EPS Next 5Y19.58%
Revenue 1Y (TTM)17.84%
Revenue growth 3Y14.02%
Revenue growth 5YN/A
Sales Q2Q%12.14%
Revenue Next Year19.19%
Revenue Next 2Y20.34%
Revenue Next 3Y19.58%
Revenue Next 5Y23.75%
EBIT growth 1Y305.85%
EBIT growth 3Y6.91%
EBIT growth 5YN/A
EBIT Next Year24.3%
EBIT Next 3Y29.09%
EBIT Next 5Y26.58%
FCF growth 1Y-13.89%
FCF growth 3Y-25.56%
FCF growth 5YN/A
OCF growth 1Y19.04%
OCF growth 3Y-4.65%
OCF growth 5YN/A
ARM HOLDINGS PLC-ADR / ARM FAQ
What is the fundamental rating for ARM stock?
ChartMill assigns a fundamental rating of 6 / 10 to ARM.
What is the valuation status of ARM HOLDINGS PLC-ADR (ARM) stock?
ChartMill assigns a valuation rating of 2 / 10 to ARM HOLDINGS PLC-ADR (ARM). This can be considered as Overvalued.
What is the profitability of ARM stock?
ARM HOLDINGS PLC-ADR (ARM) has a profitability rating of 7 / 10.
What are the PE and PB ratios of ARM HOLDINGS PLC-ADR (ARM) stock?
The Price/Earnings (PE) ratio for ARM HOLDINGS PLC-ADR (ARM) is 106.81 and the Price/Book (PB) ratio is 25.67.