ARM HOLDINGS PLC-ADR (ARM) Stock Fundamental Analysis
USA - NASDAQ:ARM - US0420682058 - ADR
140.26 USD
+0.49 (+0.35%)
141 USD
+0.74 (+0.53%)
Taking everything into account, ARM scores 7 out of 10 in our fundamental rating. ARM was compared to 112 industry peers in the Semiconductors & Semiconductor Equipment industry. ARM scores excellent points on both the profitability and health parts. This is a solid base for a good stock. ARM is valued quite expensive, but it does show an excellent growth. This makes ARM very considerable 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.
ARM had positive earnings in each of the past 5 years.
In the past 5 years ARM always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of ARM (8.55%) is better than 78.57% of its industry peers.
ARM has a better Return On Equity (11.21%) than 74.11% of its industry peers.
The Return On Invested Capital of ARM (7.78%) is better than 75.89% of its industry peers.
ARM had an Average Return On Invested Capital over the past 3 years of 6.46%. This is below the industry average of 10.86%.
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
With an excellent Profit Margin value of 18.81%, ARM belongs to the best of the industry, outperforming 82.14% of the companies in the same industry.
In the last couple of years the Profit Margin of ARM has remained more or less at the same level.
ARM has a better Operating Margin (19.54%) than 80.36% of its industry peers.
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.
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 | 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
ARM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for ARM has been increased compared to 1 year ago.
The debt/assets ratio for ARM is higher compared to a year ago.
2.2 Solvency
ARM has an Altman-Z score of 40.43. This indicates that ARM is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 40.43, ARM belongs to the best of the industry, outperforming 94.64% 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 | 40.43 |
ROIC/WACC0.67
WACC11.63%
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 Current ratio of 5.59. This is in the better half of the industry: ARM outperforms 78.57% of its industry peers.
ARM has a Quick Ratio of 5.59. This indicates that ARM is financially healthy and has no problem in meeting its short term obligations.
With an excellent Quick ratio value of 5.59, ARM belongs to the best 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 24.44% over the past year.
The Earnings Per Share has been growing by 12.27% on average over the past years. This is quite good.
Looking at the last year, ARM shows a very strong growth in Revenue. The Revenue has grown by 24.81%.
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
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.
ARM is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 23.75% yearly.
EPS Next Y4.79%
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
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
Based on the Price/Earnings ratio of 83.49, the valuation of ARM can be described as expensive.
The rest of the industry has a similar Price/Earnings ratio as ARM.
ARM's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 25.56.
The Price/Forward Earnings ratio is 61.29, which means the current valuation is very expensive for ARM.
Based on the Price/Forward Earnings ratio, ARM is valued a bit more expensive than 60.71% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ARM to the average of the S&P500 Index (34.62), we can say ARM is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 83.49 | ||
| Fwd PE | 61.29 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as ARM.
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 | 130.56 | ||
| EV/EBITDA | 134.27 |
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.
A more expensive valuation may be justified as ARM's earnings are expected to grow with 19.30% in the coming years.
PEG (NY)17.42
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 |
140.26
+0.49 (+0.35%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners8.62%
Inst Owner Change-8.37%
Ins Owners0.04%
Ins Owner ChangeN/A
Market Cap148.57B
Revenue(TTM)4.41B
Net Income(TTM)830.00M
Analysts74
Price Target157.76 (12.48%)
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)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)2.13%
PT rev (3m)3.04%
EPS NQ rev (1m)10.34%
EPS NQ rev (3m)7.25%
EPS NY rev (1m)0.01%
EPS NY rev (3m)-5.07%
Revenue NQ rev (1m)7.88%
Revenue NQ rev (3m)6.92%
Revenue NY rev (1m)-0.17%
Revenue NY rev (3m)0.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 83.49 | ||
| Fwd PE | 61.29 | ||
| P/S | 33.67 | ||
| P/FCF | 130.56 | ||
| P/OCF | 94.03 | ||
| P/B | 20.06 | ||
| P/tB | 26.83 | ||
| EV/EBITDA | 134.27 |
EPS(TTM)1.68
EY1.2%
EPS(NY)2.29
Fwd EY1.63%
FCF(TTM)1.07
FCFY0.77%
OCF(TTM)1.49
OCFY1.06%
SpS4.17
BVpS6.99
TBVpS5.23
PEG (NY)17.42
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 | 40.43 |
F-Score8
WACC11.63%
ROIC/WACC0.67
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 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 83.49 and the Price/Book (PB) ratio is 20.06.