139.78 USD
-1.53 (-1.08%)
140.04 USD
+0.26 (+0.19%)
We assign a fundamental rating of 7 out of 10 to ARM. ARM was compared to 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 shows excellent growth, but is valued quite expensive already. With these ratings, ARM could be worth investigating further 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.
ARM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ARM has a better Return On Assets (8.55%) than 77.68% of its industry peers.
ARM has a better Return On Equity (11.21%) than 74.11% of its industry peers.
ARM has a better Return On Invested Capital (7.78%) than 75.89% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ARM is below the industry average of 10.82%.
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
ARM has a better Profit Margin (18.81%) than 79.46% of its industry peers.
In the last couple of years the Profit Margin of ARM has remained more or less at the same level.
ARM has a Operating Margin of 19.54%. This is in the better half of the industry: ARM outperforms 79.46% of its industry peers.
In the last couple of years the Operating Margin of ARM has declined.
With an excellent Gross Margin value of 97.39%, ARM belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
ARM's Gross Margin has been stable in the last couple of years.
| 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
ARM has a worse debt/assets ratio than last year.
2.2 Solvency
ARM has an Altman-Z score of 40.85. This indicates that ARM is financially healthy and has little risk of bankruptcy at the moment.
ARM's Altman-Z score of 40.85 is amongst the best of the industry. ARM outperforms 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 | 40.85 |
ROIC/WACC0.61
WACC12.7%
2.3 Liquidity
ARM has a Current Ratio of 5.59. This indicates that ARM is financially healthy and has no problem in meeting 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 84.82% 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.
Measured over the past years, ARM shows a quite strong growth in Earnings Per Share. The EPS has been growing by 12.27% on average per year.
The Revenue has grown by 24.81% in the past year. This is a very strong growth!
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
Based on estimates for the next years, ARM will show a quite strong growth in Earnings Per Share. The EPS will grow by 20.00% on average per year.
Based on estimates for the next years, ARM will show a very strong growth in Revenue. The Revenue will grow by 24.28% on average per year.
EPS Next Y7.26%
EPS Next 2Y19.38%
EPS Next 3Y22.1%
EPS Next 5Y20%
Revenue Next Year22.06%
Revenue Next 2Y21.97%
Revenue Next 3Y20.87%
Revenue Next 5Y24.28%
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
With a Price/Earnings ratio of 83.20, ARM can be considered very expensive at the moment.
ARM's Price/Earnings ratio is in line with the industry average.
ARM's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.34.
Based on the Price/Forward Earnings ratio of 59.80, the valuation of ARM can be described as expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as ARM.
ARM's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 23.56.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 83.2 | ||
| Fwd PE | 59.8 |
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.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ARM is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 130.11 | ||
| EV/EBITDA | 135.79 |
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.
ARM's earnings are expected to grow with 22.10% in the coming years. This may justify a more expensive valuation.
PEG (NY)11.47
PEG (5Y)N/A
EPS Next 2Y19.38%
EPS Next 3Y22.1%
5. Dividend
5.1 Amount
ARM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
139.78
-1.53 (-1.08%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners7.58%
Inst Owner Change-8.37%
Ins Owners0.04%
Ins Owner ChangeN/A
Market Cap148.06B
Revenue(TTM)4.41B
Net Income(TTM)830.00M
Analysts74
Price Target169.85 (21.51%)
Short Float %9.74%
Short Ratio2.77
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)7.66%
PT rev (3m)10.21%
EPS NQ rev (1m)3.89%
EPS NQ rev (3m)14.63%
EPS NY rev (1m)2.35%
EPS NY rev (3m)2.46%
Revenue NQ rev (1m)2.49%
Revenue NQ rev (3m)10.76%
Revenue NY rev (1m)2.43%
Revenue NY rev (3m)2.2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 83.2 | ||
| Fwd PE | 59.8 | ||
| P/S | 33.56 | ||
| P/FCF | 130.11 | ||
| P/OCF | 93.71 | ||
| P/B | 19.99 | ||
| P/tB | 26.74 | ||
| EV/EBITDA | 135.79 |
EPS(TTM)1.68
EY1.2%
EPS(NY)2.34
Fwd EY1.67%
FCF(TTM)1.07
FCFY0.77%
OCF(TTM)1.49
OCFY1.07%
SpS4.17
BVpS6.99
TBVpS5.23
PEG (NY)11.47
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 | 40.85 |
F-Score8
WACC12.7%
ROIC/WACC0.61
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 Y7.26%
EPS Next 2Y19.38%
EPS Next 3Y22.1%
EPS Next 5Y20%
Revenue 1Y (TTM)24.81%
Revenue growth 3Y14.02%
Revenue growth 5YN/A
Sales Q2Q%34.48%
Revenue Next Year22.06%
Revenue Next 2Y21.97%
Revenue Next 3Y20.87%
Revenue Next 5Y24.28%
EBIT growth 1Y111.28%
EBIT growth 3Y6.91%
EBIT growth 5YN/A
EBIT Next Year28.45%
EBIT Next 3Y28.08%
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 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 83.2 and the Price/Book (PB) ratio is 19.99.