ARM Holdings PLC ADR (ARM) AI Stock Analysis

• Market Cap: $147.86B
• Dividend Yield: N/A
• Average Volume (3M): 4.37M
• Price to Earnings (P/E): 212.6
• Beta (1Y): 3.06
• Revenue Growth: 17.84%
• EPS Growth: 63.71%
• Country: US
• Employees: 8,330
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.35
• Shares Outstanding: 1,059,000,000
• 10 Day Avg. Volume: 5,043,373
• 30 Day Avg. Volume: 4,371,821
• 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: 1.15
• Enterprise Value/Revenue: 41.19
• Enterprise Value/Gross Profit: 43.49
• Enterprise Value/Ebitda: 206.50
• 1Y Price Target: $171.29
• Price Target Upside: 22.68% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 24

• Rating: 73 Outperform
• Price Target: $157.00 ▲(12.45% Upside)

ARM Holdings PLC ADR's overall stock score is driven by strong financial performance and a positive earnings call, highlighting robust growth in AI and data centers. However, the high P/E ratio suggests overvaluation, and mixed technical indicators indicate potential short-term weakness. The absence of a dividend yield further impacts the valuation score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and successful product adoption, supporting long-term business expansion.

Market Position in AI and Data Centers

Growth in AI and data centers positions Arm as a leader in emerging tech markets, enhancing its competitive edge and future prospects.

Strong Financial Position

A strong balance sheet with low leverage provides financial stability, allowing for strategic investments and resilience against economic fluctuations.

Negative Factors

Dependence on Key Customers

High customer concentration can pose risks to revenue stability, making the company vulnerable to changes in key customer relationships.

Licensing Revenue Decline

A decline in licensing revenue may indicate challenges in maintaining growth momentum, potentially impacting future revenue streams.

Smartphone Sector Growth Below Expectations

Underperformance in the smartphone sector could hinder revenue growth, as this is a significant market for ARM's technology.

ARM Holdings PLC ADR Business Overview & Revenue Model

Company Description

Arm Holdings plc architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers rely on to develop products. It offers microprocessors, systems intellectual property (IPs), graphics processing units, physical IP and associated systems IPs, software, tools, and other related services. Its products are used in various markets, such as automotive, computing infrastructure, consumer technologies, and Internet of things. The company operates in the United States, the People's Republic of China, Taiwan, South Korea, and internationally. The company was founded in 1990 and is headquartered in Cambridge, the United Kingdom. Arm Holdings plc operates as a subsidiary of Kronos II LLC.

How the Company Makes Money

ARM Holdings makes money primarily through licensing and royalties. The company licenses its processor designs and related technologies to semiconductor companies and original equipment manufacturers (OEMs) who integrate these designs into their own products. Licensing agreements typically involve an upfront fee for access to ARM's intellectual property, followed by ongoing royalties based on the number of devices sold that incorporate ARM's technologies. This business model allows ARM to scale its revenue without the need for significant manufacturing investments. Additionally, ARM generates revenue from support, maintenance, and training services offered to its licensees. Strategic partnerships with major technology companies also contribute to ARM's earnings, as these collaborations often lead to the development of new technologies and expansion into emerging markets.

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: Negative
• Last Price: 139.62
• 50DMA: Negative
• 100DMA: Negative
• 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 Negative. The current price of 139.62 is below the 20-day moving average (MA) of 143.79, below the 50-day MA of 144.68, and above the 200-day MA of 136.39, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 44.61 is Neutral, neither overbought nor oversold. The STOCH value of 17.26 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARM.

ARM Holdings PLC ADR Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QCOM	79 Outperform	182.57B	16.32	42.55%	2.06%	15.82%	34.20%
NXPI	76 Outperform	56.99B	26.71	22.45%	1.79%	-7.53%	-21.88%
TXN	75 Outperform	167.78B	33.74	28.39%	2.95%	3.62%	-5.27%
ARM	73 Outperform	$147.86B	212.61	11.03%	―	17.84%	63.71%
AMD	73 Outperform	258.78B	91.79	4.75%	―	27.17%	108.67%
INTC	63 Neutral	165.79B	-7.45	-20.95%	0.35%	-3.72%	-2120.70%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

ARM Holdings PLC ADR Corporate Events

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.

Arm Holdings Reports Q1 2026 Results and Hosts Webcast

On July 30, 2025, Arm Holdings plc announced its financial results for the first quarter of fiscal year 2026, which ended on June 30, 2025. The results were shared in a letter to shareholders, available on the company’s investor relations website and furnished to the SEC. The company also hosted an audio webcast to discuss these results, emphasizing its commitment to advancing AI technology and maintaining its industry-leading position.

Arm Holdings PLC Releases Q2 2025 Financial Report Amid Market Challenges

Arm Holdings PLC has released its quarterly report for the three months ending June 30, 2025, detailing its financial performance and operational insights. The report highlights the company’s dependency on a limited number of customers for significant revenue and outlines various risks, including those related to intellectual property protection, foreign exchange fluctuations, and global economic conditions. These factors could significantly impact Arm’s operations and its positioning within the industry.