ARM Holdings PLC ADR (ARM) AI Stock Analysis

• Market Cap: $122.74B
• Dividend Yield: N/A
• Average Volume (3M): 3.75M
• Price to Earnings (P/E): 145.2
• Beta (1Y): 3.15
• Revenue Growth: 24.81%
• EPS Growth: 27.33%
• Country: US
• Employees: 8,330
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.22
• Shares Outstanding: 1,061,000,000
• 10 Day Avg. Volume: 3,249,639
• 30 Day Avg. Volume: 3,749,648
• PEG Ratio: 0.94
• Price to Book (P/B): 16.40
• Price to Sales (P/S): 27.98
• P/FCF Ratio: 629.94
• Enterprise Value/Market Cap: 1.21
• Enterprise Value/Revenue: 33.64
• Enterprise Value/Gross Profit: 35.18
• Enterprise Value/Ebitda: 138.58
• 1Y Price Target: $172.33
• Price Target Upside: 52.40% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19
• EPS Forecast (FY): 1.72
• Revenue Forecast (FY): $4.86B

• Rating: 69 Neutral
• Price Target: $149.00 ▲(31.77% Upside)

ARM Holdings PLC ADR's overall stock score is driven by strong financial performance and positive earnings call highlights, indicating robust growth and strategic positioning in AI and compute markets. However, technical analysis shows bearish momentum, and the high P/E ratio suggests overvaluation, which tempers the overall score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, enhancing long-term financial stability.

Strategic Partnerships

Partnerships with major tech firms like Meta enhance ARM's technological capabilities and market reach, supporting sustainable growth.

Cash Flow Generation

Strong cash flow generation boosts financial flexibility, enabling investment in innovation and expansion, crucial for long-term success.

Negative Factors

Increasing Operating Expenses

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

Reliance on SoftBank-Related Revenue

Dependence on SoftBank-related revenue raises concerns about revenue stability and independence, affecting long-term resilience.

Power Bottlenecks in Data Centers

Power limitations in data centers could hinder ARM's ability to scale its compute solutions, affecting future growth opportunities.

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 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 shows strong financial health with impressive revenue growth and profitability metrics. The balance sheet is robust with low leverage, and cash flow generation has improved significantly. Minor concerns exist regarding operating efficiency and cash flow conversion.

Income Statement

ARM Holdings PLC ADR demonstrates strong revenue growth with a 7.06% increase in TTM, supported by a high gross profit margin of 94.71%. The net profit margin is solid at 16.96%, indicating efficient cost management. However, the EBIT and EBITDA margins have slightly decreased compared to the previous annual report, suggesting potential pressure on operating efficiency.

Balance Sheet

The balance sheet is robust with a low debt-to-equity ratio of 0.0565, reflecting conservative leverage. The return on equity is healthy at 10.64%, although it has decreased from the previous year. The equity ratio remains strong, indicating a stable financial position with significant equity backing the assets.

Cash Flow

Cash flow analysis reveals a significant free cash flow growth of 73.07% in TTM, highlighting improved cash generation. The operating cash flow to net income ratio is nearly 1, indicating strong cash conversion. However, the free cash flow to net income ratio suggests room for improvement in cash flow efficiency.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.41B	4.01B	3.23B	2.68B	2.70B	2.03B
Gross Profit	4.22B	3.80B	3.00B	2.48B	2.48B	1.79B
EBITDA	1.07B	902.90M	374.00M	841.20M	962.50M	876.80M
Net Income	830.00M	792.00M	306.00M	524.00M	549.00M	388.00M
Balance Sheet
Total Assets	9.71B	8.93B	7.93B	6.87B	6.51B	0.00
Cash, Cash Equivalents and Short-Term Investments	3.26B	2.83B	2.92B	2.21B	1.64B	0.00
Total Debt	429.00M	356.00M	226.00M	219.00M	261.00M	0.00
Total Liabilities	2.30B	2.09B	2.63B	2.81B	2.96B	0.00
Stockholders Equity	7.41B	6.84B	5.29B	4.05B	3.55B	0.00
Cash Flow
Free Cash Flow	1.14B	178.00M	947.00M	646.00M	383.00M	1.07B
Operating Cash Flow	1.58B	397.00M	1.09B	739.00M	458.00M	1.23B
Investing Cash Flow	-212.00M	-35.00M	-516.00M	-138.00M	-619.00M	-340.00M
Financing Cash Flow	-366.00M	-202.00M	-208.00M	-42.00M	-32.00M	-789.00M

ARM Holdings PLC ADR Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 113.08
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 113.08 is below the 20-day moving average (MA) of 117.45, below the 50-day MA of 134.95, and below the 200-day MA of 137.32, indicating a bearish trend. The MACD of -6.18 indicates Negative momentum. The RSI at 33.73 is Neutral, neither overbought nor oversold. The STOCH value of 45.21 is Neutral, 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	80 Outperform	$192.98B	36.27	23.34%	2.01%	13.66%	-45.40%
TXN	78 Outperform	$168.74B	34.38	29.60%	3.11%	9.90%	1.65%
AMD	73 Outperform	$341.92B	101.16	5.32%	―	31.83%	80.45%
NXPI	70 Neutral	$60.24B	29.22	21.19%	1.79%	-6.81%	-23.16%
ARM	69 Neutral	$122.74B	145.22	12.37%	―	24.81%	27.33%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
INTC	58 Neutral	$212.50B	3,878.30	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.

The most recent analyst rating on (ARM) stock is a Buy with a $200.00 price target. To see the full list of analyst forecasts on ARM Holdings PLC ADR stock, see the ARM Stock Forecast page.