ARM HOLDINGS PLC-ADR (ARM) Stock Fundamental Analysis
USA - NASDAQ:ARM - US0420682058 - ADR
170.84 USD
+2.68 (+1.59%)
Overall ARM gets a fundamental rating of 6 out of 10. We evaluated ARM against 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. 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.
ARM had a positive operating cash flow in the past year.
In the past 5 years ARM has always been profitable.
ARM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ARM's Return On Assets of 7.44% is fine compared to the rest of the industry. ARM outperforms 75.89% of its industry peers.
ARM's Return On Equity of 9.98% is fine compared to the rest of the industry. ARM outperforms 73.21% of its industry peers.
With a decent Return On Invested Capital value of 7.21%, ARM is doing good in the industry, outperforming 72.32% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ARM is below the industry average of 10.94%.
The 3 year average ROIC (6.46%) for ARM is below the current ROIC(7.21%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.44% | ||
| ROE | 9.98% | ||
| ROIC | 7.21% |
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 (16.96%) than 77.68% of its industry peers.
In the last couple of years the Profit Margin of ARM has remained more or less at the same level.
The Operating Margin of ARM (18.51%) is better than 77.68% of its industry peers.
In the last couple of years the Operating Margin of ARM has declined.
The Gross Margin of ARM (97.14%) is better than 100.00% of its industry peers.
ARM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.51% | ||
| PM (TTM) | 16.96% | ||
| GM | 97.14% |
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
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
ARM has a worse debt/assets ratio than last year.
2.2 Solvency
ARM has an Altman-Z score of 46.54. This indicates that ARM is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ARM (46.54) is better than 93.75% 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 | 0.03 | ||
| Altman-Z | 46.54 |
ROIC/WACC0.6
WACC12.04%
2.3 Liquidity
ARM has a Current Ratio of 4.99. This indicates that ARM is financially healthy and has no problem in meeting its short term obligations.
ARM's Current ratio of 4.99 is fine compared to the rest of the industry. ARM outperforms 70.54% of its industry peers.
A Quick Ratio of 4.99 indicates that ARM has no problem at all paying its short term obligations.
With an excellent Quick ratio value of 4.99, ARM belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.99 | ||
| Quick Ratio | 4.99 |
3. Growth
3.1 Past
ARM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.77%, which is quite good.
ARM shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.27% yearly.
ARM shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.84%.
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)12.77%
EPS 3Y12.27%
EPS 5YN/A
EPS Q2Q%-12.5%
Revenue 1Y (TTM)17.84%
Revenue growth 3Y14.02%
Revenue growth 5YN/A
Sales Q2Q%12.14%
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 19.58% on average per year.
ARM is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 23.75% yearly.
EPS Next Y4.78%
EPS Next 2Y18.3%
EPS Next 3Y19.13%
EPS Next 5Y19.58%
Revenue Next Year19.37%
Revenue Next 2Y20.4%
Revenue Next 3Y19.75%
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.
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
Based on the Price/Earnings ratio of 107.45, the valuation of ARM can be described as expensive.
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 27.49, which is the current average of the S&P500 Index.
ARM is valuated quite expensively with a Price/Forward Earnings ratio of 74.43.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ARM is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 22.99. ARM is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 107.45 | ||
| Fwd PE | 74.43 |
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 | 275.44 | ||
| EV/EBITDA | 180.99 |
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 19.13% in the coming years. This may justify a more expensive valuation.
PEG (NY)22.48
PEG (5Y)N/A
EPS Next 2Y18.3%
EPS Next 3Y19.13%
5. Dividend
5.1 Amount
No dividends for ARM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:ARM (10/15/2025, 3:01:10 PM)
170.84
+2.68 (+1.59%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners8.62%
Inst Owner Change0.04%
Ins Owners0.04%
Ins Owner ChangeN/A
Market Cap180.96B
Analysts74.87
Price Target154.47 (-9.58%)
Short Float %11.13%
Short Ratio3.24
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)0.99%
Min EPS beat(2)-1.76%
Max EPS beat(2)3.74%
EPS beat(4)3
Avg EPS beat(4)7.88%
Min EPS beat(4)-1.76%
Max EPS beat(4)16.01%
EPS beat(8)7
Avg EPS beat(8)14.75%
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)0
Avg Revenue beat(2)-0.78%
Min Revenue beat(2)-1.31%
Max Revenue beat(2)-0.24%
Revenue beat(4)2
Avg Revenue beat(4)1.16%
Min Revenue beat(4)-1.31%
Max Revenue beat(4)3.37%
Revenue beat(8)6
Avg Revenue beat(8)3.35%
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)0.23%
PT rev (3m)12.69%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-6.19%
EPS NY rev (1m)0.1%
EPS NY rev (3m)-5.09%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.28%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)0.56%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 107.45 | ||
| Fwd PE | 74.43 | ||
| P/S | 43.91 | ||
| P/FCF | 275.44 | ||
| P/OCF | 177.59 | ||
| P/B | 25.83 | ||
| P/tB | 35.36 | ||
| EV/EBITDA | 180.99 |
EPS(TTM)1.59
EY0.93%
EPS(NY)2.3
Fwd EY1.34%
FCF(TTM)0.62
FCFY0.36%
OCF(TTM)0.96
OCFY0.56%
SpS3.89
BVpS6.61
TBVpS4.83
PEG (NY)22.48
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.44% | ||
| ROE | 9.98% | ||
| ROCE | 9.13% | ||
| ROIC | 7.21% | ||
| ROICexc | 11.06% | ||
| ROICexgc | 16.92% | ||
| OM | 18.51% | ||
| PM (TTM) | 16.96% | ||
| GM | 97.14% | ||
| FCFM | 15.94% |
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 Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.03 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 181% | ||
| Cap/Sales | 8.78% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 105.82% | ||
| Profit Quality | 93.99% | ||
| Current Ratio | 4.99 | ||
| Quick Ratio | 4.99 | ||
| Altman-Z | 46.54 |
F-Score7
WACC12.04%
ROIC/WACC0.6
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)12.77%
EPS 3Y12.27%
EPS 5YN/A
EPS Q2Q%-12.5%
EPS Next Y4.78%
EPS Next 2Y18.3%
EPS Next 3Y19.13%
EPS Next 5Y19.58%
Revenue 1Y (TTM)17.84%
Revenue growth 3Y14.02%
Revenue growth 5YN/A
Sales Q2Q%12.14%
Revenue Next Year19.37%
Revenue Next 2Y20.4%
Revenue Next 3Y19.75%
Revenue Next 5Y23.75%
EBIT growth 1Y305.85%
EBIT growth 3Y6.91%
EBIT growth 5YN/A
EBIT Next Year24.3%
EBIT Next 3Y29.09%
EBIT Next 5Y26.58%
FCF growth 1Y-13.89%
FCF growth 3Y-25.56%
FCF growth 5YN/A
OCF growth 1Y19.04%
OCF growth 3Y-4.65%
OCF growth 5YN/A