ARM HOLDINGS PLC-ADR (ARM) Stock Fundamental Analysis
USA - NASDAQ:ARM - US0420682058 - ADR
151.42 USD
-6.83 (-4.32%)
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. Both the health and profitability get an excellent rating, making ARM a very profitable company, without any liquidiy or solvency issues. ARM is valued quite expensive, but it does show an excellent growth. These ratings would make ARM suitable for growth and quality investing!
1. Profitability
1.1 Basic Checks
ARM had positive earnings in the past year.
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
The Return On Assets of ARM (8.55%) is better than 78.57% of its industry peers.
Looking at the Return On Equity, with a value of 11.21%, ARM is in the better half of the industry, outperforming 75.89% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 7.78%, ARM is in the better half of the industry, outperforming 75.00% 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 11.05%.
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's Profit Margin of 18.81% is amongst the best of the industry. ARM outperforms 82.14% of its industry peers.
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.
In the last couple of years the Operating Margin of ARM has declined.
The Gross Margin of ARM (97.39%) 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 | 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 45.53. This indicates that ARM is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 45.53, ARM belongs to the best of the industry, outperforming 93.75% of the companies in the same industry.
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 | 45.53 |
ROIC/WACC0.65
WACC11.9%
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.
ARM has a better Current ratio (5.59) than 77.68% of its industry peers.
A Quick Ratio of 5.59 indicates that ARM has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 5.59, ARM belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 5.59 | ||
| Quick Ratio | 5.59 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 30.00% over the past year.
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!
The Revenue has been growing by 14.02% on average over the past years. This is quite good.
EPS 1Y (TTM)30%
EPS 3Y12.27%
EPS 5YN/A
EPS Q2Q%120%
Revenue 1Y (TTM)24.81%
Revenue growth 3Y14.02%
Revenue growth 5YN/A
Sales Q2Q%34.48%
3.2 Future
ARM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.58% yearly.
Based on estimates for the next years, ARM will show a very strong growth in Revenue. The Revenue will grow by 23.75% on average per year.
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.
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
The Price/Earnings ratio is 92.33, which means the current valuation is very expensive for ARM.
The rest of the industry has a similar Price/Earnings ratio as ARM.
Compared to an average S&P500 Price/Earnings ratio of 25.67, ARM is valued quite expensively.
The Price/Forward Earnings ratio is 66.16, which means the current valuation is very expensive for ARM.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ARM is on the same level as its industry peers.
ARM is valuated expensively when we compare the Price/Forward Earnings ratio to 31.86, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 92.33 | ||
| Fwd PE | 66.16 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as ARM.
ARM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 140.94 | ||
| EV/EBITDA | 152.52 |
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 19.30% in the coming years. This may justify a more expensive valuation.
PEG (NY)19.27
PEG (5Y)N/A
EPS Next 2Y18.13%
EPS Next 3Y19.3%
5. Dividend
5.1 Amount
ARM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:ARM (11/7/2025, 2:47:07 PM)
151.42
-6.83 (-4.32%)
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 Cap160.39B
Revenue(TTM)4.41B
Net Income(TTM)830.00M
Analysts74
Price Target157.76 (4.19%)
Short Float %10.66%
Short Ratio2.94
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)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
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)2.25%
PT rev (3m)13.44%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.27%
EPS NY rev (1m)0.02%
EPS NY rev (3m)-5.07%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.66%
Revenue NY rev (1m)-0.15%
Revenue NY rev (3m)0.46%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 92.33 | ||
| Fwd PE | 66.16 | ||
| P/S | 36.35 | ||
| P/FCF | 140.94 | ||
| P/OCF | 101.52 | ||
| P/B | 21.65 | ||
| P/tB | 28.97 | ||
| EV/EBITDA | 152.52 |
EPS(TTM)1.64
EY1.08%
EPS(NY)2.29
Fwd EY1.51%
FCF(TTM)1.07
FCFY0.71%
OCF(TTM)1.49
OCFY0.99%
SpS4.17
BVpS6.99
TBVpS5.23
PEG (NY)19.27
PEG (5Y)N/A
Graham Number16.06
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 | 45.53 |
F-Score8
WACC11.9%
ROIC/WACC0.65
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)30%
EPS 3Y12.27%
EPS 5YN/A
EPS Q2Q%120%
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 92.33 and the Price/Book (PB) ratio is 21.65.