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 109 industry peers in the Semiconductors & Semiconductor Equipment industry. While ARM has a great health rating, its profitability is only average at the moment. 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
ARM has a better Return On Assets (5.38%) than 69.72% of its industry peers.
ARM's Return On Equity of 7.49% is fine compared to the rest of the industry. ARM outperforms 60.55% of its industry peers.
ARM has a Return On Invested Capital of 2.31%. This is comparable to the rest of the industry: ARM outperforms 53.21% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ARM is below the industry average of 10.70%.
The 3 year average ROIC (7.14%) for ARM is well above the current ROIC(2.31%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.38% | ||
| ROE | 7.49% | ||
| ROIC | 2.31% |
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
ARM has a Profit Margin of 12.12%. This is in the better half of the industry: ARM outperforms 69.72% of its industry peers.
In the last couple of years the Profit Margin of ARM has declined.
ARM has a Operating Margin (5.78%) which is in line with its industry peers.
In the last couple of years the Operating Margin of ARM has declined.
Looking at the Gross Margin, with a value of 95.54%, ARM belongs to the top 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 | 5.78% | ||
| PM (TTM) | 12.12% | ||
| GM | 95.54% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ARM is destroying value.
The number of shares outstanding for ARM has been increased compared to 1 year ago.
Compared to 1 year ago, ARM has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 43.58 indicates that ARM is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 43.58, ARM belongs to the best of the industry, outperforming 96.33% 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 | ||
| Altman-Z | 43.58 |
ROIC/WACC0.17
WACC13.59%
2.3 Liquidity
ARM has a Current Ratio of 3.61. This indicates that ARM is financially healthy and has no problem in meeting its short term obligations.
ARM has a Current ratio of 3.61. This is in the better half of the industry: ARM outperforms 60.55% of its industry peers.
ARM has a Quick Ratio of 3.61. This indicates that ARM is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 3.61, ARM is in the better half of the industry, outperforming 66.97% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.61 | ||
| Quick Ratio | 3.61 |
3. Growth
3.1 Past
The earnings per share for ARM have decreased strongly by -43.14% in the last year.
The Earnings Per Share has been decreasing by -7.80% on average over the past years.
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%110%
Revenue 1Y (TTM)20.68%
Revenue growth 3Y16.84%
Revenue growth 5YN/A
Sales Q2Q%39.11%
3.2 Future
Based on estimates for the next years, ARM will show a very strong growth in Earnings Per Share. The EPS will grow by 23.77% on average per year.
The Revenue is expected to grow by 19.64% on average over the next years. This is quite good.
EPS Next Y30.85%
EPS Next 2Y31.46%
EPS Next 3Y31.3%
EPS Next 5Y23.77%
Revenue Next Year24.67%
Revenue Next 2Y24.53%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 106.15 indicates a quite expensive valuation of ARM.
ARM's Price/Earnings is on the same level as the industry average.
ARM's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 31.24.
The Price/Forward Earnings ratio is 71.62, which means the current valuation is very expensive for ARM.
ARM's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. ARM is more expensive than 61.47% 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 22.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 106.15 | ||
| Fwd PE | 71.62 |
4.2 Price Multiples
ARM's Enterprise Value to EBITDA ratio is in line with the industry average.
ARM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 206.66 | ||
| EV/EBITDA | 415.55 |
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's earnings are expected to grow with 31.30% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.44
PEG (5Y)N/A
EPS Next 2Y31.46%
EPS Next 3Y31.3%
5. Dividend
5.1 Amount
No dividends for ARM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
ARM HOLDINGS PLC-ADR
NASDAQ:ARM (10/10/2024, 3:00:01 PM)
149.67
+1.24 (+0.84%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners
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Market Cap156.85B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 106.15 | ||
| Fwd PE | 71.62 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
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FCF(TTM)
FCFY
OCF(TTM)
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SpS
BVpS
TBVpS
PEG (NY)3.44
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.38% | ||
| ROE | 7.49% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 5.78% | ||
| PM (TTM) | 12.12% | ||
| GM | 95.54% | ||
| 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 | 3.61 | ||
| Quick Ratio | 3.61 | ||
| 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 Y30.85%
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
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FCF growth 3Y
FCF growth 5Y
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