ARM HOLDINGS PLC-ADR (ARM) Stock Fundamental Analysis
USA - NASDAQ:ARM - US0420682058 - ADR
132.53 USD
-4.46 (-3.26%)
132.61 USD
+0.08 (+0.06%)
ARM gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals 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 shows excellent growth, but is valued quite expensive already. 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.
Each year in the past 5 years ARM has been profitable.
Each year in the past 5 years ARM had a positive operating cash flow.
1.2 Ratios
The Return On Assets of ARM (8.55%) is better than 78.57% of its industry peers.
With a decent Return On Equity value of 11.21%, ARM is doing good in the industry, outperforming 74.11% of the companies in the same industry.
ARM has a better Return On Invested Capital (7.78%) than 75.89% 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 10.86%.
The 3 year average ROIC (6.46%) for ARM is below the current ROIC(7.78%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.55% | ||
| ROE | 11.21% | ||
| ROIC | 7.78% |
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 an excellent Profit Margin value of 18.81%, ARM belongs to the best of the industry, outperforming 82.14% 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 an excellent Operating Margin value of 19.54%, ARM belongs to the best of the industry, outperforming 80.36% of the companies in the same industry.
ARM's Operating Margin has declined in the last couple of years.
ARM's Gross Margin of 97.39% 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 | 19.54% | ||
| PM (TTM) | 18.81% | ||
| GM | 97.39% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ARM is destroying value.
Compared to 1 year ago, ARM has more shares outstanding
Compared to 1 year ago, ARM has a worse debt to assets ratio.
2.2 Solvency
ARM has an Altman-Z score of 39.66. This indicates that ARM is financially healthy and has little risk of bankruptcy at the moment.
ARM has a better Altman-Z score (39.66) 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 | 0.02 | ||
| Altman-Z | 39.66 |
ROIC/WACC0.67
WACC11.61%
2.3 Liquidity
A Current Ratio of 5.59 indicates that ARM has no problem at all paying its short term obligations.
The Current ratio of ARM (5.59) is better than 78.57% of its industry peers.
A Quick Ratio of 5.59 indicates that ARM has no problem at all paying its short term obligations.
ARM has a Quick ratio of 5.59. This is amongst the best in the industry. ARM outperforms 85.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 5.59 | ||
| Quick Ratio | 5.59 |
3. Growth
3.1 Past
ARM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 24.44%, which is quite impressive.
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 24.81%.
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)24.44%
EPS 3Y12.27%
EPS 5YN/A
EPS Q2Q%30%
Revenue 1Y (TTM)24.81%
Revenue growth 3Y14.02%
Revenue growth 5YN/A
Sales Q2Q%34.48%
3.2 Future
The Earnings Per Share is expected to grow by 19.58% on average over the next years. This is quite good.
ARM is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 23.75% yearly.
EPS Next Y4.79%
EPS Next 2Y18.13%
EPS Next 3Y19.3%
EPS Next 5Y19.58%
Revenue Next Year19.17%
Revenue Next 2Y20.29%
Revenue Next 3Y19.81%
Revenue Next 5Y23.75%
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
The Price/Earnings ratio is 78.89, which means the current valuation is very expensive for ARM.
ARM's Price/Earnings is on the same level as the industry average.
ARM is valuated expensively when we compare the Price/Earnings ratio to 25.07, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 57.91, the valuation of ARM can be described as expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as ARM.
Compared to an average S&P500 Price/Forward Earnings ratio of 34.08, ARM is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 78.89 | ||
| Fwd PE | 57.91 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ARM is on the same level as its industry peers.
ARM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 123.36 | ||
| EV/EBITDA | 131.53 |
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.
ARM's earnings are expected to grow with 19.30% in the coming years. This may justify a more expensive valuation.
PEG (NY)16.46
PEG (5Y)N/A
EPS Next 2Y18.13%
EPS Next 3Y19.3%
5. Dividend
5.1 Amount
No dividends for ARM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
132.53
-4.46 (-3.26%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners8.62%
Inst Owner Change-8.37%
Ins Owners0.04%
Ins Owner ChangeN/A
Market Cap140.38B
Revenue(TTM)4.41B
Net Income(TTM)830.00M
Analysts74
Price Target157.76 (19.04%)
Short Float %9.92%
Short Ratio2.59
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)6.96%
Min EPS beat(2)-1.76%
Max EPS beat(2)15.67%
EPS beat(4)3
Avg EPS beat(4)7.8%
Min EPS beat(4)-1.76%
Max EPS beat(4)15.67%
EPS beat(8)7
Avg EPS beat(8)11.81%
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)2.28%
Min Revenue beat(2)-1.31%
Max Revenue beat(2)5.88%
Revenue beat(4)2
Avg Revenue beat(4)1.78%
Min Revenue beat(4)-1.31%
Max Revenue beat(4)5.88%
Revenue beat(8)6
Avg Revenue beat(8)3.18%
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)2.13%
PT rev (3m)3.04%
EPS NQ rev (1m)10.34%
EPS NQ rev (3m)7.25%
EPS NY rev (1m)0.01%
EPS NY rev (3m)-5.07%
Revenue NQ rev (1m)7.88%
Revenue NQ rev (3m)6.92%
Revenue NY rev (1m)-0.17%
Revenue NY rev (3m)0.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 78.89 | ||
| Fwd PE | 57.91 | ||
| P/S | 31.82 | ||
| P/FCF | 123.36 | ||
| P/OCF | 88.85 | ||
| P/B | 18.95 | ||
| P/tB | 25.35 | ||
| EV/EBITDA | 131.53 |
EPS(TTM)1.68
EY1.27%
EPS(NY)2.29
Fwd EY1.73%
FCF(TTM)1.07
FCFY0.81%
OCF(TTM)1.49
OCFY1.13%
SpS4.17
BVpS6.99
TBVpS5.23
PEG (NY)16.46
PEG (5Y)N/A
Graham Number16.26
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.55% | ||
| ROE | 11.21% | ||
| ROCE | 9.85% | ||
| ROIC | 7.78% | ||
| ROICexc | 12.4% | ||
| ROICexgc | 18.8% | ||
| OM | 19.54% | ||
| PM (TTM) | 18.81% | ||
| GM | 97.39% | ||
| FCFM | 25.79% |
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-Score8
Asset Turnover0.45
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 209.48% | ||
| Cap/Sales | 10.02% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 147.25% | ||
| Profit Quality | 137.11% | ||
| Current Ratio | 5.59 | ||
| Quick Ratio | 5.59 | ||
| Altman-Z | 39.66 |
F-Score8
WACC11.61%
ROIC/WACC0.67
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)24.44%
EPS 3Y12.27%
EPS 5YN/A
EPS Q2Q%30%
EPS Next Y4.79%
EPS Next 2Y18.13%
EPS Next 3Y19.3%
EPS Next 5Y19.58%
Revenue 1Y (TTM)24.81%
Revenue growth 3Y14.02%
Revenue growth 5YN/A
Sales Q2Q%34.48%
Revenue Next Year19.17%
Revenue Next 2Y20.29%
Revenue Next 3Y19.81%
Revenue Next 5Y23.75%
EBIT growth 1Y111.28%
EBIT growth 3Y6.91%
EBIT growth 5YN/A
EBIT Next Year24.3%
EBIT Next 3Y28.9%
EBIT Next 5Y26.58%
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 FAQ
What is the fundamental rating for ARM stock?
ChartMill assigns a fundamental rating of 7 / 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 78.89 and the Price/Book (PB) ratio is 18.95.