ARM Holdings PLC ADR (ARM)
NASDAQ:ARM
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ARM Holdings PLC ADR
(NASDAQ:ARM)
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Rating:74Outperform
Price Target:
$222.00
▲(33.15% Upside)
Action:ReiteratedDate:04/25/26
The score is supported primarily by strong financial quality (exceptional gross margins and low leverage) and a constructive earnings outlook with solid guided growth and strong licensing indicators. It is held back by a highly stretched technical condition (RSI/Stoch in extreme territory) and a very expensive valuation (P/E ~130), with additional watchpoints around declining TTM free cash flow growth and rising operating expenses.
Positive Factors
Extremely high gross margins
Arm's licensing model yields very high gross margins (~95% TTM), a durable structural advantage. High margins provide persistent operating leverage as royalties scale, funding R&D and platform investments while insulating core profitability from cyclical revenue swings over the medium term.
Negative Factors
Rising operating expenses
Aggressive R&D and engineering headcount expansion (OpEx +37% YoY) is a structural pressure on margins. If revenue/royalty growth slows or lags product ramp timing, sustained high operating spending could compress operating margins and raise the bar for profitable scaling over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Extremely high gross margins
Arm's licensing model yields very high gross margins (~95% TTM), a durable structural advantage. High margins provide persistent operating leverage as royalties scale, funding R&D and platform investments while insulating core profitability from cyclical revenue swings over the medium term.
Read all positive factors
ARM Holdings PLC ADR (ARM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$229.26B
Dividend YieldN/A
Average Volume (3M)7.01M
Price to Earnings (P/E)130.1
Beta (1Y)2.55
Revenue Growth26.45%
EPS Growth-2.03%
CountryUS
Employees8,330
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.43
Shares Outstanding1,061,000,000
10 Day Avg. Volume5,102,422
30 Day Avg. Volume7,006,627
Financial Highlights & Ratios
PEG Ratio0.94
Price to Book (P/B)16.40
Price to Sales (P/S)27.98
P/FCF Ratio629.94
Enterprise Value/Market Cap0.91
Enterprise Value/Revenue44.75
Enterprise Value/Gross Profit46.89
Enterprise Value/Ebitda199.63
Forecast
1Y Price Target
$183.71Price Target Upside10.19% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering24
EPS Forecast (FY)2.13
Revenue Forecast (FY)$5.92B
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 intellec...
How the Company Makes Money
Arm primarily makes money by licensing its semiconductor IP and collecting royalties on chips that ship using that IP. (1) Licensing revenue: customers (typically chip designers and semiconductor companies) pay fees to access Arm architectures, co...
ARM Holdings PLC ADR Key Performance Indicators (KPIs)
Any
Annualized Contract Value
Measures the yearly value of all active contracts, highlighting the company's revenue potential and customer commitment levels.
Measures the yearly value of all active contracts, highlighting the company's revenue potential and customer commitment levels.
Data provided by:
The Fly
The FlyARM Holdings PLC ADR Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call was firmly positive on fundamental business momentum: record revenue and royalties, explosive data center growth (>100% YoY), strong licensing/ACV expansion (+28% YoY), and pronounced CSS and hyperscaler traction. Near‑term risks include elevated R&D/OpEx (+37% YoY), expected deceleration in royalty growth into the next quarter (low‑teens), and potential smartphone unit headwinds from memory constraints (management quantifies the downside as modest). Management’s guidance still points to continued growth and they emphasize strong long‑term secular opportunities in cloud, edge, and physical AI.Positive Updates
Record Revenue and Profitability
Total revenue of $1.24B, up 26% year‑over‑year; fourth consecutive >$1B quarter. Non‑GAAP EPS of $0.43 and non‑GAAP operating income of $505M (up 14% YoY) with a non‑GAAP operating margin of ~41%.
Negative Updates
Rising Operating Expenses / R&D Investment
Non‑GAAP operating expenses increased to $716M, up 37% YoY, driven by aggressive R&D and engineering headcount expansion (investments in next‑generation architectures, compute subsystems, chiplets and full SoCs). OpEx growth is a near‑term margin pressure despite higher operating income.
Read all updates
Q3-2026 Updates
Positive
Negative
Record Revenue and Profitability
Total revenue of $1.24B, up 26% year‑over‑year; fourth consecutive >$1B quarter. Non‑GAAP EPS of $0.43 and non‑GAAP operating income of $505M (up 14% YoY) with a non‑GAAP operating margin of ~41%.
Read all positive updates
Company Guidance
Arm guided Q4 revenue of $1.47 billion ± $50 million (midpoint ≈ +18% year‑over‑year), with royalties expected to be up low‑teens YoY and licensing up high‑teens YoY; they forecast non‑GAAP operating expenses of approximately $745 million and non‑GAAP EPS of $0.58 ± $0.04. The company also highlighted ACV growth of 28% YoY as a key licensing indicator and cited a growing base of long‑duration contracts and higher royalty rates as supporting confidence to continue investing in R&D and next‑generation architectures.ARM Holdings PLC ADR Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
78
Positive
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.67B | 4.01B | 3.23B | 2.68B | 2.70B | 2.03B |
| Gross Profit | 4.46B | 3.80B | 3.00B | 2.48B | 2.48B | 1.79B |
| EBITDA | 1.05B | 902.90M | 374.00M | 841.20M | 962.50M | 876.80M |
| Net Income | 801.00M | 792.00M | 306.00M | 524.00M | 549.00M | 388.00M |
Balance Sheet | ||||||
| Total Assets | 10.18B | 8.93B | 7.93B | 6.87B | 6.51B | 0.00 |
| Cash, Cash Equivalents and Short-Term Investments | 3.54B | 2.83B | 2.92B | 2.21B | 1.64B | 0.00 |
| Total Debt | 858.00M | 356.00M | 226.00M | 219.00M | 261.00M | 0.00 |
| Total Liabilities | 2.38B | 2.09B | 2.63B | 2.81B | 2.96B | 0.00 |
| Stockholders Equity | 7.80B | 6.84B | 5.29B | 4.05B | 3.55B | 0.00 |
Cash Flow | ||||||
| Free Cash Flow | 970.00M | 178.00M | 947.00M | 646.00M | 383.00M | 1.07B |
| Operating Cash Flow | 1.52B | 397.00M | 1.09B | 739.00M | 458.00M | 1.23B |
| Investing Cash Flow | -312.00M | -35.00M | -516.00M | -138.00M | -619.00M | -340.00M |
| Financing Cash Flow | -470.00M | -202.00M | -208.00M | -42.00M | -32.00M | -789.00M |
ARM Holdings PLC ADR Technical Analysis
Positive
166.73
Price Trends
134.13
Positive
126.68
Positive
138.62
Positive
Market Momentum
8.62
Negative
68.29
Neutral
88.50
Negative
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 166.73 is above the 20-day moving average (MA) of 150.00, above the 50-day MA of 134.13, and above the 200-day MA of 138.62, indicating a bullish trend. The MACD of 8.62 indicates Negative momentum. The RSI at 68.29 is Neutral, neither overbought nor oversold. The STOCH value of 88.50 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ARM.
ARM Holdings PLC ADR Risk Analysis
ARM Holdings PLC ADR disclosed 87 risk factors in its most recent earnings report. ARM Holdings PLC ADR reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
Our development of CSS, chiplets, and complete end chip solutions as well as other more integrated compute products may subject us to new or enhanced competitive, brand, technological, regulatory and financial risks. Q1, 2025
ARM Holdings PLC ADR Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $545.56B | 80.54 | 7.18% | ― | 34.34% | 163.27% | |
74 Outperform | $229.26B | 130.14 | 11.03% | ― | 26.45% | -2.03% | |
74 Outperform | $245.27B | 28.56 | 32.49% | 3.11% | 14.89% | 10.49% | |
72 Outperform | $59.86B | 10.55 | 20.73% | 1.79% | -2.74% | -18.67% | |
70 Outperform | $160.33B | 15.44 | 21.63% | 2.01% | 10.25% | -48.23% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | $427.16B | -14.70 | -2.95% | ― | 1.36% | 86.07% |
* Technology Sector Average
ARM
ARM Holdings PLC ADR
198.65
87.00
77.92%
AMD
Advanced Micro Devices
323.21
227.15
236.47%
INTC
Intel
84.52
64.18
315.54%
NXPI
NXP Semiconductors
230.39
51.19
28.56%
QCOM
Qualcomm
150.00
6.48
4.52%
TXN
Texas Instruments
265.00
109.15
70.04%
ARM Holdings PLC ADR Corporate Events
Arm CEO Rene Haas Takes Additional Helm at SoftBank Group International
Apr 21, 2026
Arm Holdings plc, the British chip designer, said on April 21, 2026 that Chief Executive Officer Rene Haas has taken on the additional role of CEO of SoftBank Group International, effective April 20, 2026. SoftBank Group International oversees cer...
Arm Reaffirms Q4 2026 Outlook at ‘Arm Everywhere’ Investor Event
Mar 24, 2026
Arm Holdings plc disclosed that it hosted its ‘Arm Everywhere’ investor event in March 2026, where management provided an update on the company’s business and strategic direction to the investment community. During the event, hel...
Arm Launches First Arm-Designed Data Center CPU, Marking Shift Into Production Silicon for AI Era
Mar 24, 2026
On March 24, 2026, Arm Holdings plc announced a landmark expansion of its compute platform into production silicon, unveiling its first Arm-designed data center processor, the Arm AGI CPU, built specifically for agentic AI workloads. The move broa...
Arm Holdings Posts Fiscal Q3 2026 Results for Quarter Ended December 31, 2025
Feb 4, 2026
Arm Holdings plc, the Cambridge-headquartered designer of power-efficient, high-performance compute architectures widely used across the global technology ecosystem, continues to position its platform as a foundational layer for AI workloads and c...
Arm Holdings Files Q3 FY2025 Form 6-K With Updated Financials and Risk Disclosures
Feb 4, 2026
Arm Holdings plc has filed a Form 6-K with the U.S. Securities and Exchange Commission reporting its unaudited financial statements and management’s discussion and analysis for the three- and nine-month periods ended December 31, 2025, there...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.