ARM HOLDINGS PLC-ADR (ARM) Stock Fundamental Analysis
USA - NASDAQ:ARM - US0420682058 - ADR
152.64 USD
+0.49 (+0.33%)
152.5 USD
-0.14 (-0.09%)
Overall ARM gets a fundamental rating of 6 out of 10. We evaluated ARM against 112 industry peers in the Semiconductors & Semiconductor Equipment industry. ARM has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. ARM is valued quite expensively, but it does show have an excellent growth rating. These ratings could make ARM a good candidate for growth and quality investing.
1. Profitability
1.1 Basic Checks
ARM had positive earnings in the past year.
In the past year ARM had a positive cash flow from operations.
ARM had positive earnings in each of the past 5 years.
Each year in the past 5 years ARM had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 7.44%, ARM is doing good in the industry, outperforming 75.89% of the companies in the same industry.
ARM has a Return On Equity of 9.98%. This is in the better half of the industry: ARM outperforms 73.21% of its industry peers.
The Return On Invested Capital of ARM (7.21%) is better than 72.32% of its industry peers.
ARM had an Average Return On Invested Capital over the past 3 years of 6.46%. This is below the industry average of 10.95%.
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
With a decent Profit Margin value of 16.96%, ARM is doing good in the industry, outperforming 77.68% of the companies in the same industry.
In the last couple of years the Profit Margin of ARM has remained more or less at the same level.
The Operating Margin of ARM (18.51%) is better than 77.68% of its industry peers.
In the last couple of years the Operating Margin of ARM has declined.
The Gross Margin of ARM (97.14%) 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 | 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.
The number of shares outstanding for ARM has been increased compared to 1 year ago.
ARM has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 42.41 indicates that ARM is not in any danger for bankruptcy at the moment.
The Altman-Z score of ARM (42.41) is better than 93.75% of its industry peers.
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 | 42.41 |
ROIC/WACC0.63
WACC11.46%
2.3 Liquidity
A Current Ratio of 4.99 indicates that ARM has no problem at all paying its short term obligations.
ARM's Current ratio of 4.99 is fine compared to the rest of the industry. ARM outperforms 72.32% of its industry peers.
ARM has a Quick Ratio of 4.99. This indicates that ARM is financially healthy and has no problem in meeting its short term obligations.
ARM's Quick ratio of 4.99 is amongst the best of the industry. ARM outperforms 82.14% 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.
ARM shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.27% yearly.
ARM shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.84%.
The Revenue has been growing by 14.02% on average over the past years. This is quite good.
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 Y4.78%
EPS Next 2Y18.3%
EPS Next 3Y19.13%
EPS Next 5Y19.58%
Revenue Next Year19.37%
Revenue Next 2Y20.4%
Revenue Next 3Y19.75%
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
ARM is valuated quite expensively with a Price/Earnings ratio of 96.00.
Compared to the rest of the industry, the Price/Earnings ratio of ARM is on the same level as its industry peers.
ARM is valuated expensively when we compare the Price/Earnings ratio to 27.86, which is the current average of the S&P500 Index.
ARM is valuated quite expensively with a Price/Forward Earnings ratio of 66.50.
ARM's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of ARM to the average of the S&P500 Index (23.32), we can say ARM is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 96 | ||
| Fwd PE | 66.5 |
4.2 Price Multiples
ARM's Enterprise Value to EBITDA ratio is in line with the industry average.
ARM's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 246.1 | ||
| EV/EBITDA | 163.92 |
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.
A more expensive valuation may be justified as ARM's earnings are expected to grow with 19.13% in the coming years.
PEG (NY)20.09
PEG (5Y)N/A
EPS Next 2Y18.3%
EPS Next 3Y19.13%
5. Dividend
5.1 Amount
No dividends for ARM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
152.64
+0.49 (+0.33%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners8.62%
Inst Owner Change0%
Ins Owners0.04%
Ins Owner ChangeN/A
Market Cap161.69B
Analysts74.87
Price Target154.47 (1.2%)
Short Float %11.13%
Short Ratio3.24
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)0.23%
PT rev (3m)12.69%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-5.61%
EPS NY rev (1m)0.1%
EPS NY rev (3m)-5.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.56%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)0.48%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 96 | ||
| Fwd PE | 66.5 | ||
| P/S | 39.23 | ||
| P/FCF | 246.1 | ||
| P/OCF | 158.67 | ||
| P/B | 23.07 | ||
| P/tB | 31.59 | ||
| EV/EBITDA | 163.92 |
EPS(TTM)1.59
EY1.04%
EPS(NY)2.3
Fwd EY1.5%
FCF(TTM)0.62
FCFY0.41%
OCF(TTM)0.96
OCFY0.63%
SpS3.89
BVpS6.61
TBVpS4.83
PEG (NY)20.09
PEG (5Y)N/A
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
ROICexcg growth 3Y-16.23%
ROICexcg 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 | 42.41 |
F-Score7
WACC11.46%
ROIC/WACC0.63
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 Y4.78%
EPS Next 2Y18.3%
EPS Next 3Y19.13%
EPS Next 5Y19.58%
Revenue 1Y (TTM)17.84%
Revenue growth 3Y14.02%
Revenue growth 5YN/A
Sales Q2Q%12.14%
Revenue Next Year19.37%
Revenue Next 2Y20.4%
Revenue Next 3Y19.75%
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