ARM HOLDINGS PLC-ADR (ARM)
US0420682058 - ADR
Taking everything into account, ARM scores 5 out of 10 in our fundamental rating. ARM was compared to 108 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. While showing a medium growth rate, ARM is valued expensive at the moment.
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
The Return On Assets of ARM (7.93%) is better than 72.22% of its industry peers.
Looking at the Return On Equity, with a value of 10.66%, ARM is in the better half of the industry, outperforming 69.44% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 4.43%, ARM is in the better half of the industry, outperforming 64.81% 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 11.23%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.93% | ||
| ROE | 10.66% | ||
| ROIC | 4.43% |
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
With a decent Profit Margin value of 18.13%, ARM is doing good in the industry, outperforming 75.93% of the companies in the same industry.
In the last couple of years the Profit Margin of ARM has declined.
ARM has a Operating Margin of 11.54%. This is in the better half of the industry: ARM outperforms 67.59% of its industry peers.
In the last couple of years the Operating Margin of ARM has declined.
ARM's Gross Margin of 95.98% is amongst the best of the industry. ARM outperforms 100.00% of its industry peers.
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 | 11.54% | ||
| PM (TTM) | 18.13% | ||
| GM | 95.98% |
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
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
The debt/assets ratio for ARM is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 44.17 indicates that ARM is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 44.17, ARM belongs to the top of the industry, outperforming 95.37% 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 | 0.01 | ||
| Altman-Z | 44.17 |
ROIC/WACC0.32
WACC13.77%
2.3 Liquidity
A Current Ratio of 4.52 indicates that ARM has no problem at all paying its short term obligations.
ARM has a better Current ratio (4.52) than 71.30% of its industry peers.
A Quick Ratio of 4.52 indicates that ARM has no problem at all paying its short term obligations.
The Quick ratio of ARM (4.52) is better than 82.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.52 | ||
| Quick Ratio | 4.52 |
3. Growth
3.1 Past
ARM shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -43.14%.
ARM shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.80% yearly.
ARM shows a strong growth in Revenue. In the last year, the Revenue has grown by 20.68%.
Measured over the past years, ARM shows a quite strong growth in Revenue. The Revenue has been growing by 16.84% on average per year.
EPS 1Y (TTM)-43.14%
EPS 3Y-7.8%
EPS 5YN/A
EPS Q2Q%-16.67%
Revenue 1Y (TTM)20.68%
Revenue growth 3Y16.84%
Revenue growth 5YN/A
Sales Q2Q%4.71%
3.2 Future
The Earnings Per Share is expected to grow by 23.77% on average over the next years. This is a very strong growth
ARM is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 19.64% yearly.
EPS Next Y30.52%
EPS Next 2Y31.26%
EPS Next 3Y31.57%
EPS Next 5Y23.77%
Revenue Next Year24.14%
Revenue Next 2Y24.41%
Revenue Next 3Y23.74%
Revenue Next 5Y19.64%
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 104.67 indicates a quite expensive valuation of ARM.
ARM's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 29.59, ARM is valued quite expensively.
The Price/Forward Earnings ratio is 67.83, 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 24.06, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 104.67 | ||
| Fwd PE | 67.83 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as ARM.
The rest of the industry has a similar Price/Free Cash Flow ratio as ARM.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 282.06 | ||
| EV/EBITDA | 250.27 |
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 31.57% in the coming years.
PEG (NY)3.43
PEG (5Y)N/A
EPS Next 2Y31.26%
EPS Next 3Y31.57%
5. Dividend
5.1 Amount
No dividends for ARM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
ARM HOLDINGS PLC-ADR
NASDAQ:ARM (12/4/2024, 8:00:00 PM)
After market: 140.93 -0.37 (-0.26%)141.3
+0.92 (+0.66%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap148.08B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 104.67 | ||
| Fwd PE | 67.83 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)3.43
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.93% | ||
| ROE | 10.66% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 11.54% | ||
| PM (TTM) | 18.13% | ||
| GM | 95.98% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 4.52 | ||
| Quick Ratio | 4.52 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)-43.14%
EPS 3Y-7.8%
EPS 5Y
EPS Q2Q%
EPS Next Y30.52%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)20.68%
Revenue growth 3Y16.84%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y