ARM HOLDINGS PLC-ADR (ARM) Stock Fundamental Analysis
USA - NASDAQ:ARM - US0420682058 - ADR
150.64 USD
-4.06 (-2.62%)
149.71 USD
-0.93 (-0.62%)
We assign a fundamental rating of 6 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 is valued quite expensively, but it does show have an excellent growth rating. These ratings could make ARM a good candidate 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 (7.44%) is better than 75.89% of its industry peers.
Looking at the Return On Equity, with a value of 9.98%, ARM is in the better half of the industry, outperforming 73.21% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 7.21%, ARM is in the better half of the industry, outperforming 73.21% 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 10.87%.
The last Return On Invested Capital (7.21%) for ARM is above the 3 year average (6.46%), which is a sign of increasing profitability.
| 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
The Profit Margin of ARM (16.96%) is better 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.
ARM's Operating Margin of 18.51% is fine compared to the rest of the industry. ARM outperforms 77.68% of 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 97.14%, ARM belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
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 | 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
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
The debt/assets ratio for ARM is higher compared to a year ago.
2.2 Solvency
ARM has an Altman-Z score of 41.87. This indicates that ARM is financially healthy and has little risk of bankruptcy at the moment.
ARM's Altman-Z score of 41.87 is amongst the best of the industry. ARM outperforms 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 | 41.87 |
ROIC/WACC0.61
WACC11.89%
2.3 Liquidity
A Current Ratio of 4.99 indicates that ARM has no problem at all paying its short term obligations.
ARM has a better Current ratio (4.99) than 72.32% 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 82.14% 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.
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 17.84% in the past year. This is quite good.
The Revenue has been growing by 14.02% on average over the past years. This is quite good.
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
ARM is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 22.83% yearly.
The Revenue is expected to grow by 23.75% on average over the next years. This is a very strong growth
EPS Next Y4.68%
EPS Next 2Y18.01%
EPS Next 3Y19.19%
EPS Next 5Y22.83%
Revenue Next Year19.39%
Revenue Next 2Y20.41%
Revenue Next 3Y19.47%
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 94.74, the valuation of ARM can be described as expensive.
The rest of the industry has a similar Price/Earnings ratio as ARM.
The average S&P500 Price/Earnings ratio is at 27.30. ARM is valued rather expensively when compared to this.
Based on the Price/Forward Earnings ratio of 65.96, 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 22.73, ARM is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 94.74 | ||
| Fwd PE | 65.96 |
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 is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 242.87 | ||
| EV/EBITDA | 161.72 |
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 19.19% in the coming years. This may justify a more expensive valuation.
PEG (NY)20.26
PEG (5Y)N/A
EPS Next 2Y18.01%
EPS Next 3Y19.19%
5. Dividend
5.1 Amount
No dividends for ARM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
150.64
-4.06 (-2.62%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners8.03%
Inst Owner Change4.13%
Ins Owners0.04%
Ins Owner ChangeN/A
Market Cap159.57B
Analysts73.17
Price Target154.29 (2.42%)
Short Float %11.42%
Short Ratio3.22
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)0.77%
PT rev (3m)12.98%
EPS NQ rev (1m)0.22%
EPS NQ rev (3m)-5.61%
EPS NY rev (1m)-5.18%
EPS NY rev (3m)-10.78%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.56%
Revenue NY rev (1m)0.63%
Revenue NY rev (3m)0.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 94.74 | ||
| Fwd PE | 65.96 | ||
| P/S | 38.72 | ||
| P/FCF | 242.87 | ||
| P/OCF | 156.59 | ||
| P/B | 22.77 | ||
| P/tB | 31.18 | ||
| EV/EBITDA | 161.72 |
EPS(TTM)1.59
EY1.06%
EPS(NY)2.28
Fwd EY1.52%
FCF(TTM)0.62
FCFY0.41%
OCF(TTM)0.96
OCFY0.64%
SpS3.89
BVpS6.61
TBVpS4.83
PEG (NY)20.26
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 | 41.87 |
F-Score7
WACC11.89%
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)12.77%
EPS 3Y12.27%
EPS 5YN/A
EPS Q2Q%-12.5%
EPS Next Y4.68%
EPS Next 2Y18.01%
EPS Next 3Y19.19%
EPS Next 5Y22.83%
Revenue 1Y (TTM)17.84%
Revenue growth 3Y14.02%
Revenue growth 5YN/A
Sales Q2Q%12.14%
Revenue Next Year19.39%
Revenue Next 2Y20.41%
Revenue Next 3Y19.47%
Revenue Next 5Y23.75%
EBIT growth 1Y305.85%
EBIT growth 3Y6.91%
EBIT growth 5YN/A
EBIT Next Year24.62%
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