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ARM Holdings PLC ADR
(NASDAQ:ARM)
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Rating:75Outperform
Price Target:
$376.00
▲(125.51% Upside)
Action:Reiterated
Date:06/02/26
The score is driven primarily by strong financial quality (growth, margins, and low leverage) and a supportive earnings outlook for continued ~20% growth. These positives are tempered by an extremely high P/E valuation and technically overbought conditions that increase near-term downside/pullback risk.
Positive Factors
Strong licensing and royalty growth
Arm's dual revenue streams—upfront licensing and per-unit royalties—produce a scalable, recurring model tied to partner product cycles. Robust license and royalty growth across fiscal 2026 underpins cash generation and provides durable topline expansion as more silicon and server designs adopt Arm IP.
Negative Factors
AGI CPU supply‑chain and capacity constraints
Material demand exceeding initial capacity creates execution risk: constrained wafer, memory and packaging supply can delay shipments, slow revenue recognition, and blunt near-term margin scalability. Solving capacity requires multi‑party coordination and could defer the timing of durable revenue from AGI CPU ramps.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong licensing and royalty growth
Arm's dual revenue streams—upfront licensing and per-unit royalties—produce a scalable, recurring model tied to partner product cycles. Robust license and royalty growth across fiscal 2026 underpins cash generation and provides durable topline expansion as more silicon and server designs adopt Arm IP.
Read all positive factors
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 (ARM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$355.66B
Dividend YieldN/A
Average Volume (3M)13.35M
Price to Earnings (P/E)409.0
Beta (1Y)2.60
Revenue Growth22.79%
EPS Growth12.94%
CountryUS
Employees8,330
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.84
Shares Outstanding1,064,055,300
10 Day Avg. Volume14,287,512
30 Day Avg. Volume13,346,998
Financial Highlights & Ratios
PEG Ratio13.35
Price to Book (P/B)19.37
Price to Sales (P/S)32.62
P/FCF Ratio163.95
Enterprise Value/Market Cap1.25
Enterprise Value/Revenue90.12
Enterprise Value/Gross Profit95.23
Enterprise Value/Ebitda315.36
Forecast
1Y Price Target
$334.35Price Target Upside100.53% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering24
EPS Forecast (FY)2.18
Revenue Forecast (FY)$5.99B
ARM Holdings PLC ADR Business Overview & Revenue Model
Company Description
Arm Holdings plc is a leading technology firm that conceptualizes, engineers, and licenses core processing unit (CPU) designs and complementary technologies. These foundational innovations are crucial for semiconductor manufacturers and original e...
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 Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Positive
The call communicated strong, broad-based growth with record revenue, EPS and accelerating data center momentum driven by Arm AGI CPU demand and expanding cloud adoption. Key positives include double-digit revenue growth, record margins, ACV growth, and major customer support and design wins. Near-term challenges include supply-chain/capacity limits for AGI CPU production, elevated R&D-driven operating expenses (up ~30% YoY), and some royalty volatility from mobile market comp and unit weakness. Management maintained conservative near-term guidance while expressing confidence in multi-year targets (e.g., $15B AGI CPU by FYE31) and long-term margin expansion.Positive Updates
Record Quarterly and Fiscal Year Revenue
Q4 revenue of $1.49B, up 20% year-over-year (highest quarterly revenue ever); fiscal 2026 revenue of $4.92B, up 23% year-over-year.
Negative Updates
Supply Chain Constraints for AGI CPU Production
Although demand for Arm AGI CPU grew to >$2B for FY27–28, supply (wafers, memory, packaging, test equipment) was sized initially to support ~$1B; company is actively securing additional capacity and therefore did not raise near-term revenue guidance for AGI CPU despite higher demand.
Read all updates
Q4-2026 Updates
Positive
Negative
Record Quarterly and Fiscal Year Revenue
Q4 revenue of $1.49B, up 20% year-over-year (highest quarterly revenue ever); fiscal 2026 revenue of $4.92B, up 23% year-over-year.
Read all positive updates
Company Guidance
For Q1 of fiscal 2027 Arm guided revenue of $1.26 billion ± $50 million (about +20% YoY), with both royalty and license & other revenue each expected to be up around 20% YoY, non‑GAAP operating expense of ~ $760 million, and non‑GAAP EPS of $0.40 ± $0.04. Management reiterated first production Arm AGI CPU revenues are expected in the fourth quarter of this fiscal year, is maintaining a near‑term AGI CPU outlook of $1 billion (while noting > $2 billion of customer demand across FY27–FY28) and reaffirmed long‑term targets of $15 billion AGI CPU revenue + $10 billion IP revenue (total $25 billion) by FYE31 (translating to > $9 EPS). They also said ACV grew 22% YoY, license revenue is expected to be back‑end weighted (~60% H2), royalty growth is expected in the ~20% range for the year, OpEx will increase modestly quarter‑to‑quarter but grow less than revenue (driving incremental margin improvement), and first‑gen chip gross margins are ~30%+.ARM Holdings PLC ADR Financial Statement Overview
Summary
Income Statement
83
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
78
Positive
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.92B | 4.01B | 3.23B | 2.68B | 2.70B |
| Gross Profit | 4.55B | 3.80B | 3.00B | 2.48B | 2.48B |
| EBITDA | 1.41B | 902.90M | 374.00M | 841.20M | 962.50M |
| Net Income | 904.00M | 792.00M | 306.00M | 524.00M | 549.00M |
Balance Sheet | |||||
| Total Assets | 10.70B | 8.93B | 7.93B | 6.87B | 6.51B |
| Cash, Cash Equivalents and Short-Term Investments | 3.60B | 2.83B | 2.92B | 2.21B | 1.64B |
| Total Debt | 457.00M | 356.00M | 226.00M | 219.00M | 261.00M |
| Total Liabilities | 2.42B | 2.09B | 2.63B | 2.81B | 2.96B |
| Stockholders Equity | 8.29B | 6.84B | 5.29B | 4.05B | 3.55B |
Cash Flow | |||||
| Free Cash Flow | 979.00M | 178.00M | 947.00M | 646.00M | 383.00M |
| Operating Cash Flow | 1.52B | 397.00M | 1.09B | 739.00M | 458.00M |
| Investing Cash Flow | -325.00M | -35.00M | -516.00M | -138.00M | -619.00M |
| Financing Cash Flow | -548.00M | -202.00M | -208.00M | -42.00M | -32.00M |
ARM Holdings PLC ADR Technical Analysis
Neutral
166.73
Price Trends
285.30
Positive
208.52
Positive
173.48
Positive
Market Momentum
22.48
Positive
48.39
Neutral
15.83
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARM, the sentiment is Neutral. The current price of 166.73 is below the 20-day moving average (MA) of 374.86, below the 50-day MA of 285.30, and below the 200-day MA of 173.48, indicating a neutral trend. The MACD of 22.48 indicates Positive momentum. The RSI at 48.39 is Neutral, neither overbought nor oversold. The STOCH value of 15.83 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ARM.
ARM Holdings PLC ADR Risk Analysis
ARM Holdings PLC ADR disclosed 80 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 0 New Risks
ARM Holdings PLC ADR Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $850.49B | 175.16 | 8.08% | ― | 34.97% | 123.87% | |
75 Outperform | $355.66B | 409.02 | 11.86% | ― | 22.79% | 12.94% | |
74 Outperform | $259.76B | 48.47 | 32.49% | 3.11% | 14.89% | 10.49% | |
70 Outperform | $69.94B | 26.51 | 26.14% | 1.79% | 2.37% | 13.28% | |
70 Outperform | $199.62B | 20.23 | 40.19% | 2.01% | 5.21% | -6.72% | |
63 Neutral | $644.94B | -212.45 | -2.95% | ― | 1.36% | 86.07% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
ARM
ARM Holdings PLC ADR
354.57
198.24
126.81%
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444.80
326.79%
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184.79
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298.07
93.36
45.61%
ARM Holdings PLC ADR Corporate Events
Arm Holdings Posts Fiscal 2026 Results and Hosts Webcast to Brief Investors
May 6, 2026
Arm Holdings plc reported its financial results for the fourth quarter and fiscal year ended March 31, 2026, via a shareholder letter published on May 6, 2026, on its investor relations website and furnished to the U.S. Securities and Exchange Com...
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...
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.