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

NASDAQ:ARM • US0420682058

Current stock price

185.17 USD
+9.68 (+5.52%)
Last:

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.
  • 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.
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 Return On Assets of 7.87%. This is in the better half of the industry: ARM outperforms 77.39% of its industry peers.
  • ARM has a Return On Equity of 10.27%. This is in the better half of the industry: ARM outperforms 72.17% of its industry peers.
  • ARM has a Return On Invested Capital of 7.61%. This is in the better half of the industry: ARM outperforms 75.65% of its industry peers.
  • Measured over the past 3 years, the Average Return On Invested Capital for ARM is below the industry average of 10.89%.
  • 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

  • Looking at the Profit Margin, with a value of 17.15%, ARM is in the better half of the industry, outperforming 79.13% 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.
  • With a decent Operating Margin value of 18.80%, ARM is doing good in the industry, outperforming 77.39% of the companies in the same industry.
  • ARM's Operating Margin has declined in the last couple of years.
  • ARM has a better Gross Margin (97.50%) than 99.13% of its industry peers.
  • ARM's Gross Margin has been stable in the last couple of years.
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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ROAROEROICOperating and Profit MarginShow most profitable peers

7

2. ARM Health Analysis

2.1 Basic Checks

  • With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ARM is destroying value.
  • The number of shares outstanding for ARM has been increased compared to 1 year ago.
  • Compared to 1 year ago, ARM has a worse debt to assets ratio.
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

  • ARM has an Altman-Z score of 48.77. This indicates that ARM is financially healthy and has little risk of bankruptcy at the moment.
  • ARM has a better Altman-Z score (48.77) than 90.43% 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 RankSector Rank
Debt/Equity 0
Debt/FCF 0.03
Altman-Z 48.77
ROIC/WACC0.57
WACC13.24%
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.
  • The Current ratio of ARM (5.43) is better than 75.65% of its industry peers.
  • ARM has a Quick Ratio of 5.43. This indicates that ARM is financially healthy and has no problem in meeting its short term obligations.
  • Looking at the Quick ratio, with a value of 5.43, ARM is in the better half of the industry, outperforming 78.26% of the companies in the same industry.
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

  • The Earnings Per Share has grown by an nice 18.62% over the past year.
  • The Earnings Per Share has been growing by 12.27% on average over the past years. This is quite good.
  • Looking at the last year, ARM shows a very strong growth in Revenue. The Revenue has grown by 26.45%.
  • ARM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.02% yearly.
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

  • ARM is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 22.43% yearly.
  • ARM is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 22.11% yearly.
EPS Next Y7.92%
EPS Next 2Y14.32%
EPS Next 3Y21.78%
EPS Next 5Y22.43%
Revenue Next Year22.41%
Revenue Next 2Y21.73%
Revenue Next 3Y23.79%
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

  • The Price/Earnings ratio is 107.66, which means the current valuation is very expensive for ARM.
  • ARM's Price/Earnings is on the same level as the industry average.
  • ARM's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.66.
  • The Price/Forward Earnings ratio is 86.39, which means the current valuation is very expensive for ARM.
  • ARM's Price/Forward Earnings is on the same level as the industry average.
  • ARM is valuated expensively when we compare the Price/Forward Earnings ratio to 38.00, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 107.66
Fwd PE 86.39
ARM Price Earnings VS Forward Price EarningsARM Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80 100

4.2 Price Multiples

  • The rest of the industry has a similar Enterprise Value to EBITDA ratio as ARM.
  • ARM's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 204.53
EV/EBITDA 164.38
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.
  • A more expensive valuation may be justified as ARM's earnings are expected to grow with 21.78% in the coming years.
PEG (NY)13.59
PEG (5Y)N/A
EPS Next 2Y14.32%
EPS Next 3Y21.78%

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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 (4/22/2026, 10:56:05 AM)

185.17

+9.68 (+5.52%)

Chartmill FA Rating
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)02-04
Earnings (Next)05-06
Inst Owners8.12%
Inst Owner Change1.07%
Ins Owners0.04%
Ins Owner Change-9.78%
Market Cap196.14B
Revenue(TTM)4.67B
Net Income(TTM)801.00M
Analysts74.67
Price Target166.76 (-9.94%)
Short Float %11.16%
Short Ratio2.23
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)12.73%
PT rev (3m)1.66%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.78%
EPS NY rev (1m)0.31%
EPS NY rev (3m)1.82%
Revenue NQ rev (1m)-0.13%
Revenue NQ rev (3m)1.78%
Revenue NY rev (1m)-0.1%
Revenue NY rev (3m)0.98%
Valuation
Industry RankSector Rank
PE 107.66
Fwd PE 86.39
P/S 41.99
P/FCF 204.53
P/OCF 128.87
P/B 25.15
P/tB 33.06
EV/EBITDA 164.38
EPS(TTM)1.72
EY0.93%
EPS(NY)2.14
Fwd EY1.16%
FCF(TTM)0.91
FCFY0.49%
OCF(TTM)1.44
OCFY0.78%
SpS4.41
BVpS7.36
TBVpS5.6
PEG (NY)13.59
PEG (5Y)N/A
Graham Number16.8789 (-90.88%)
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 48.77
F-Score7
WACC13.24%
ROIC/WACC0.57
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 Y7.92%
EPS Next 2Y14.32%
EPS Next 3Y21.78%
EPS Next 5Y22.43%
Revenue 1Y (TTM)26.45%
Revenue growth 3Y14.02%
Revenue growth 5YN/A
Sales Q2Q%26.35%
Revenue Next Year22.41%
Revenue Next 2Y21.73%
Revenue Next 3Y23.79%
Revenue Next 5Y22.11%
EBIT growth 1Y98.19%
EBIT growth 3Y6.91%
EBIT growth 5YN/A
EBIT Next Year23.6%
EBIT Next 3Y26.32%
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.


How profitable is ARM HOLDINGS PLC-ADR (ARM) stock?

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


What is the valuation of ARM HOLDINGS PLC-ADR based on its PE and PB ratios?

The Price/Earnings (PE) ratio for ARM HOLDINGS PLC-ADR (ARM) is 107.66 and the Price/Book (PB) ratio is 25.15.


What is the financial health of ARM HOLDINGS PLC-ADR (ARM) stock?

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