ARM HOLDINGS PLC-ADR (ARM) Stock Fundamental Analysis
NASDAQ:ARM - Nasdaq - US0420682058 - ADR - Currency: USD
ARM gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 110 industry peers in the Semiconductors & Semiconductor Equipment industry. ARM gets an excellent profitability rating and is at the same time showing great financial health properties. ARM is valued quite expensively, but it does show have an excellent growth rating. This makes ARM very considerable 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.
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.
1.2 Ratios
The Return On Assets of ARM (8.87%) is better than 78.18% of its industry peers.
The Return On Equity of ARM (11.58%) is better than 73.64% of its industry peers.
The Return On Invested Capital of ARM (8.20%) is better than 75.45% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ARM is below the industry average of 10.58%.
The last Return On Invested Capital (8.20%) for ARM is above the 3 year average (6.46%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.87% | ||
| ROE | 11.58% | ||
| ROIC | 8.2% |
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
The Profit Margin of ARM (19.77%) is better than 81.82% of its industry peers.
ARM's Profit Margin has been stable in the last couple of years.
The Operating Margin of ARM (20.74%) is better than 79.09% of its industry peers.
In the last couple of years the Operating Margin of ARM has declined.
ARM has a Gross Margin of 96.98%. This is amongst the best in the industry. ARM outperforms 100.00% of its industry peers.
ARM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.74% | ||
| PM (TTM) | 19.77% | ||
| GM | 96.98% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ARM is destroying value.
ARM has more shares outstanding than it did 1 year ago.
ARM has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 46.15 indicates that ARM is not in any danger for bankruptcy at the moment.
The Altman-Z score of ARM (46.15) is better than 96.36% of its industry peers.
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 | ||
| Altman-Z | 46.15 |
ROIC/WACC0.65
WACC12.53%
2.3 Liquidity
A Current Ratio of 5.20 indicates that ARM has no problem at all paying its short term obligations.
With a decent Current ratio value of 5.20, ARM is doing good in the industry, outperforming 77.27% of the companies in the same industry.
ARM has a Quick Ratio of 5.20. This indicates that ARM is financially healthy and has no problem in meeting its short term obligations.
ARM's Quick ratio of 5.20 is amongst the best of the industry. ARM outperforms 85.45% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 5.2 | ||
| Quick Ratio | 5.2 |
3. Growth
3.1 Past
ARM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 167.86%, which is quite impressive.
ARM shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.27% yearly.
Looking at the last year, ARM shows a very strong growth in Revenue. The Revenue has grown by 23.94%.
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)167.86%
EPS 3Y12.27%
EPS 5YN/A
EPS Q2Q%52.78%
Revenue 1Y (TTM)23.94%
Revenue growth 3Y14.02%
Revenue growth 5YN/A
Sales Q2Q%33.73%
3.2 Future
ARM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.21% yearly.
Based on estimates for the next years, ARM will show a quite strong growth in Revenue. The Revenue will grow by 19.37% on average per year.
EPS Next Y10.39%
EPS Next 2Y20.97%
EPS Next 3Y21.6%
EPS Next 5Y19.22%
Revenue Next Year18.7%
Revenue Next 2Y20.35%
Revenue Next 3Y19.97%
Revenue Next 5Y19.37%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 86.76, the valuation of ARM can be described as expensive.
ARM's Price/Earnings ratio is in line with the industry average.
ARM is valuated expensively when we compare the Price/Earnings ratio to 27.41, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 78.59 indicates a quite expensive valuation of ARM.
ARM's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. ARM is more expensive than 63.64% of the companies in the same industry.
ARM's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 35.19.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 86.76 | ||
| Fwd PE | 78.59 |
4.2 Price Multiples
ARM's Enterprise Value to EBITDA is on the same level as the industry average.
ARM's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 953.94 | ||
| EV/EBITDA | 148.94 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ARM does not grow enough to justify the current Price/Earnings ratio.
ARM has a very decent profitability rating, which may justify a higher PE ratio.
ARM's earnings are expected to grow with 21.60% in the coming years. This may justify a more expensive valuation.
PEG (NY)8.35
PEG (5Y)N/A
EPS Next 2Y20.97%
EPS Next 3Y21.6%
5. Dividend
5.1 Amount
No dividends for ARM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:ARM (7/14/2025, 10:15:05 AM)
142.29
-3.65 (-2.5%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners8.29%
Inst Owner Change0.22%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap150.72B
Analysts73.17
Price Target137.07 (-3.67%)
Short Float %13.11%
Short Ratio3.52
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)8.64%
Min EPS beat(2)3.74%
Max EPS beat(2)13.54%
EPS beat(4)4
Avg EPS beat(4)12.05%
Min EPS beat(4)3.74%
Max EPS beat(4)16.01%
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)1
Avg Revenue beat(2)1.28%
Min Revenue beat(2)-0.24%
Max Revenue beat(2)2.8%
Revenue beat(4)3
Avg Revenue beat(4)2.2%
Min Revenue beat(4)-0.24%
Max Revenue beat(4)3.37%
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)0.37%
PT rev (3m)-16.54%
EPS NQ rev (1m)0.36%
EPS NQ rev (3m)-15.93%
EPS NY rev (1m)-5.91%
EPS NY rev (3m)-12.26%
Revenue NQ rev (1m)0.19%
Revenue NQ rev (3m)-3.87%
Revenue NY rev (1m)-0.23%
Revenue NY rev (3m)-3.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 86.76 | ||
| Fwd PE | 78.59 | ||
| P/S | 37.61 | ||
| P/FCF | 953.94 | ||
| P/OCF | 379.65 | ||
| P/B | 22.04 | ||
| P/tB | 29.74 | ||
| EV/EBITDA | 148.94 |
EPS(TTM)1.64
EY1.15%
EPS(NY)1.81
Fwd EY1.27%
FCF(TTM)0.15
FCFY0.1%
OCF(TTM)0.37
OCFY0.26%
SpS3.78
BVpS6.46
TBVpS4.78
PEG (NY)8.35
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.87% | ||
| ROE | 11.58% | ||
| ROCE | 10.38% | ||
| ROIC | 8.2% | ||
| ROICexc | 12.68% | ||
| ROICexgc | 19.27% | ||
| OM | 20.74% | ||
| PM (TTM) | 19.77% | ||
| GM | 96.98% | ||
| FCFM | 3.94% |
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 Turnover0.45
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 130.6% | ||
| Cap/Sales | 5.96% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 39.15% | ||
| Profit Quality | 19.95% | ||
| Current Ratio | 5.2 | ||
| Quick Ratio | 5.2 | ||
| Altman-Z | 46.15 |
F-Score7
WACC12.53%
ROIC/WACC0.65
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)167.86%
EPS 3Y12.27%
EPS 5YN/A
EPS Q2Q%52.78%
EPS Next Y10.39%
EPS Next 2Y20.97%
EPS Next 3Y21.6%
EPS Next 5Y19.22%
Revenue 1Y (TTM)23.94%
Revenue growth 3Y14.02%
Revenue growth 5YN/A
Sales Q2Q%33.73%
Revenue Next Year18.7%
Revenue Next 2Y20.35%
Revenue Next 3Y19.97%
Revenue Next 5Y19.37%
EBIT growth 1Y610.26%
EBIT growth 3Y6.91%
EBIT growth 5YN/A
EBIT Next Year27.94%
EBIT Next 3Y29.88%
EBIT Next 5Y26.61%
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