ARM Holdings PLC ADR (ARM) AI Stock Analysis

• Market Cap: $170.21B
• Dividend Yield: N/A
• Average Volume (3M): 5.17M
• Price to Earnings (P/E): 244.8
• Beta (1Y): 3.10
• Revenue Growth: 17.84%
• EPS Growth: 63.71%
• Country: US
• Employees: 8,330
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.22
• Shares Outstanding: 1,059,000,000
• 10 Day Avg. Volume: 3,723,226
• 30 Day Avg. Volume: 5,172,549
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: 41.19
• Enterprise Value/Gross Profit: 43.49
• Enterprise Value/Ebitda: 206.50
• 1Y Price Target: $185.09
• Price Target Upside: 15.54% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 75 Outperform
• Price Target: $181.00 ▲(12.99% Upside)

ARM Holdings PLC ADR's strong financial performance and positive earnings call sentiment are the primary drivers of its overall score. The company's robust revenue growth, strategic partnerships, and successful platform adoption highlight its competitive positioning. However, the high P/E ratio suggests potential overvaluation, and mixed technical indicators indicate some caution is warranted. The absence of a dividend yield and challenges such as increasing operating expenses and reliance on SoftBank-related revenue also weigh on the score.

Positive Factors

Revenue Growth

Consistent revenue growth demonstrates expanding market reach and product adoption, supporting long-term business sustainability.

Strategic Partnerships

Strategic partnerships with major tech firms enhance ARM's market position and innovation capabilities in AI and compute markets.

Cash Flow Generation

Strong cash flow generation supports investment in growth opportunities and provides financial flexibility for strategic initiatives.

Negative Factors

Increasing Operating Expenses

Rising operating expenses can pressure margins and profitability, potentially impacting long-term financial performance.

Reliance on SoftBank-Related Revenue

Dependence on related party revenue may pose risks to revenue stability and independence, affecting long-term growth prospects.

Legal Challenges

Legal setbacks can hinder ARM's competitive position and create uncertainty around its licensing agreements, impacting future operations.

ARM Holdings PLC ADR Business Overview & Revenue Model

Company Description

ARM Holdings PLC ADR (ARM) is a leading semiconductor and software design company headquartered in Cambridge, United Kingdom. The company specializes in the development of microprocessor architecture and related technologies, primarily serving sectors such as mobile, automotive, and Internet of Things (IoT). ARM's core products include its ARM architecture, which is used in a wide range of devices from smartphones to embedded systems, and its software tools that facilitate the design and development of hardware based on its architecture.

How the Company Makes Money

ARM generates revenue primarily through licensing its technology and architecture to semiconductor manufacturers and other technology companies. The company earns fees from licensing agreements, which allow customers to design and manufacture chips based on ARM's architecture. Additionally, ARM receives royalties on the chips sold that incorporate its designs, creating a recurring revenue stream. Key partnerships with major tech firms, such as Apple, Qualcomm, and Samsung, significantly contribute to ARM's earnings, as these companies integrate ARM's technology into their products. The company's focus on innovation and expansion into emerging markets like IoT and automotive further enhances its revenue potential.

ARM Holdings PLC ADR Financial Statement Overview

Summary

ARM Holdings PLC ADR exhibits a strong overall financial position with impressive revenue growth, solid profitability metrics, and robust cash flow generation. The low debt levels and high equity ratio underpin financial stability, positioning the company well for future growth. Despite the strong performance, continued focus on operational efficiency could further enhance margins and profitability.

Income Statement

ARM Holdings PLC ADR shows strong income statement performance. The TTM gross profit margin is impressive at 96.55%, indicating robust cost management. The net profit margin stands at 16.96%, while the EBIT margin is 18.52%, both reflecting healthy profitability. Revenue growth is substantial, with a TTM increase of 10.19% over the previous year, driven by strong market demand. However, the EBITDA margin of 16.91% suggests some areas for improvement in operational efficiency.

Balance Sheet

The balance sheet of ARM Holdings is solid, with a low debt-to-equity ratio of 0.06 and a strong equity ratio of 74.53% in TTM, indicating financial stability and low leverage. Return on Equity (ROE) is high at 9.98%, showcasing effective use of equity to generate profits. The strong equity position reduces potential risks from financial leverage, supporting long-term growth.

Cash Flow

Cash flow analysis for ARM Holdings shows a positive outlook, with a TTM operating cash flow to net income ratio of 1.46, indicating good cash generation from operations. The free cash flow growth rate is substantial at 271.91%, reflecting effective capital expenditure management and robust cash flow generation. The free cash flow to net income ratio is 0.95, further affirming efficient cash conversion.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.12B	4.01B	3.23B	2.68B	2.70B	2.03B
Gross Profit	3.90B	3.80B	3.00B	2.48B	2.48B	1.79B
EBITDA	822.00M	902.90M	374.00M	841.20M	962.50M	876.80M
Net Income	699.00M	792.00M	306.00M	524.00M	549.00M	388.00M
Balance Sheet
Total Assets	9.39B	8.93B	7.93B	6.87B	6.51B	0.00
Cash, Cash Equivalents and Short-Term Investments	2.91B	2.83B	2.92B	2.21B	1.64B	0.00
Total Debt	396.00M	356.00M	226.00M	219.00M	261.00M	0.00
Total Liabilities	2.39B	2.09B	2.63B	2.81B	2.96B	0.00
Stockholders Equity	7.01B	6.84B	5.29B	4.05B	3.55B	0.00
Cash Flow
Free Cash Flow	661.00M	178.00M	947.00M	646.00M	383.00M	1.07B
Operating Cash Flow	1.02B	397.00M	1.09B	739.00M	458.00M	1.23B
Investing Cash Flow	-333.00M	-35.00M	-516.00M	-138.00M	-619.00M	-340.00M
Financing Cash Flow	-229.00M	-202.00M	-208.00M	-42.00M	-32.00M	-789.00M

ARM Holdings PLC ADR Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 160.19
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARM, the sentiment is Positive. The current price of 160.19 is below the 20-day moving average (MA) of 168.19, above the 50-day MA of 154.83, and above the 200-day MA of 139.81, indicating a neutral trend. The MACD of 2.76 indicates Positive momentum. The RSI at 47.08 is Neutral, neither overbought nor oversold. The STOCH value of 16.98 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ARM.

ARM Holdings PLC ADR Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AMD	80 Outperform	$405.79B	127.15	5.32%	―	31.83%	80.45%
QCOM	78 Outperform	$186.49B	16.67	44.62%	1.94%	15.82%	34.20%
ARM	75 Outperform	$170.21B	244.75	11.03%	―	17.84%	63.71%
TXN	68 Neutral	$144.80B	29.07	29.60%	3.36%	9.90%	1.65%
NXPI	65 Neutral	$51.45B	25.10	21.19%	1.93%	-6.81%	-23.16%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
INTC	61 Neutral	$172.94B	2,761.15	0.19%	―	-1.49%	―

ARM Holdings PLC ADR Corporate Events

Arm Holdings Releases Q3 2025 Financial Report Highlighting Key Risks

Arm Holdings PLC has released its quarterly report for the three and six months ended September 30, 2025. The report includes unaudited financial statements and management’s discussion on the company’s financial condition and results of operations. The company highlights various risk factors that could impact its future performance, including its dependence on the semiconductor industry, reliance on a limited number of customers, and potential challenges in protecting its intellectual property. The report underscores the importance of these factors in shaping Arm’s strategic direction and operational focus.

Arm Holdings PLC Reports Strong Financial Growth for Fiscal Year 2025

Arm Holdings PLC reported its financial results for the fiscal year ending March 31, 2025, showing a significant increase in revenue to $4,007 million from $3,233 million in the previous year. This growth is attributed to new licensing agreements, renewals, and an improved product mix. The company’s profit before tax rose to $756 million, up from $312 million, despite increased operating costs driven by higher employee numbers and IT expenses. Arm continues to focus on expanding its customer base and product offerings, aiming to establish a global standard in the semiconductor industry. The company is also investing in new technologies and partnerships to enhance its market position, particularly in AI and energy-efficient computing.

Arm Holdings PLC Announces Successful 2025 AGM Results

On September 9, 2025, Arm Holdings PLC held its Annual General Meeting where shareholders voted on various proposals. All proposals, including the re-election of several directors and the re-appointment of Deloitte LLP as auditors, were approved by a majority vote, reflecting strong shareholder support for the company’s current management and strategic direction.

Arm Holdings PLC Announces 2025 AGM Details and Resolutions

On August 11, 2025, Arm Holdings PLC announced the distribution of notices and proxy materials for its Annual General Meeting (AGM) scheduled for September 9, 2025, in Cambridge, UK. The AGM will address several resolutions, including the approval of the company’s financial accounts, directors’ remuneration, and the re-election of board members. This meeting is significant for stakeholders as it involves key decisions on the company’s governance and financial strategies.