Education
About Us
Working with TipRanks
Follow Us
ARM Holdings PLC ADR (ARM)
NASDAQ:ARM
Top Page
ARM Holdings PLC ADR
(NASDAQ:ARM)
71Outperform
Positive Factors
Earnings Performance
ARM reported a better than expected quarter, with revenue and EPS exceeding estimates and consensus.
Growth Opportunities
Expanding opportunities from NVIDIA Grace, MSFT Cobalt, and Google Axion present potential growth in Arm's data center server-related revenue.
Negative Factors
Revenue Guidance
Analyst expects initial F2026 revenue guidance to be below consensus expectations, potentially impacting investor sentiment.
Tariff Uncertainty
Tariff uncertainties pose a risk to demand, particularly as 62% of Arm's royalties are tied to consumer electronics.
ARM Holdings PLC ADR (ARM) vs. S&P 500 (SPY)
Market Cap
$129.05B
Dividend YieldN/A
Average Volume (3M)5.33M
Price to Earnings (P/E)161.6
Beta (1Y)3.13
Revenue Growth25.73%
EPS Growth865.12%
CountryUS
Employees7,096
SectorTechnology
Sector Strength65
IndustrySemiconductors
Share Statistics
EPS (TTM)0.55
Shares Outstanding1,051,000,000
10 Day Avg. Volume4,248,870
30 Day Avg. Volume5,325,888
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.00
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit42.98
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$146.38Price Target Upside17.87% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering20
ARM Holdings PLC ADR Business Overview & Revenue Model
Company DescriptionArm 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 MoneyARM Holdings makes money primarily through licensing its intellectual property to semiconductor companies and device manufacturers. The company's revenue model is based on licensing fees and royalties. When companies use ARM's architecture to design their chips, they pay an initial license fee, followed by ongoing royalties based on the number of chips produced or sold. ARM's key revenue streams include the mobile and computing markets, where its technology is integral to the function of smartphones, tablets, and increasingly, laptops. Additionally, ARM has significant partnerships with major technology companies and silicon manufacturers, which contribute to its earnings through collaborative design and innovation projects. The company's strategic focus on expanding its presence in the IoT and automotive sectors is also a growing source of revenue.
ARM Holdings PLC ADR Key Performance Indicators (KPIs)
Any
Annualized Contract Value
Measures the yearly value of contracts, providing insight into recurring revenue potential and customer commitment levels.
Measures the yearly value of contracts, providing insight into recurring revenue potential and customer commitment levels.
Data provided by:
Main Street Data
Main Street DataARM Holdings PLC ADR Financial Statement Overview
Summary
ARM Holdings PLC ADR showcases strong financial performance, driven by high profit margins and operational efficiency. The balance sheet is robust with minimal leverage and solid equity backing. However, the decline in free cash flow growth rate is a concern and indicates areas for potential improvement.Income Statement
ARM Holdings PLC ADR demonstrates robust financial performance with a TTM gross profit margin of 94.69% and net profit margin of 21.82%, indicating strong profitability. The revenue growth rate from the previous annual period to TTM is 14.25%, showcasing healthy growth. Both EBIT and EBITDA margins are solid, at 11.99% and 16.65% respectively, reflecting operational efficiency. However, a decline in EBIT margin from the earlier periods suggests rising operational costs or competitive pressures.―
Balance Sheet
The balance sheet reflects a strong financial position with a low debt-to-equity ratio of 0.04, indicating minimal leverage. The equity ratio is high at 75.55%, highlighting financial stability. Return on Equity (ROE) is 12.56%, which is decent but has room for improvement. The company benefits from solid equity backing but should aim to enhance ROE to maximize shareholder value.78
Cash Flow
The cash flow analysis shows a stable cash generation with a TTM free cash flow of $626 million. The operating cash flow to net income ratio is 1.00, demonstrating effective conversion of income to cash. The free cash flow to net income ratio stands at 0.78, indicating a significant portion of net income is translated into free cash flow. However, the free cash flow growth rate compared to the previous period is -33.90%, suggesting a need for improvement.―
| Breakdown | |||
| Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|
| Income Statement | Total Revenue | ||
| 3.23B | 2.68B | 2.70B | 2.03B | Gross Profit |
| 3.00B | 2.57B | 2.57B | 1.88B | EBIT |
| 111.00M | 671.00M | 633.00M | 239.00M | EBITDA |
| 279.00M | 855.00M | 865.00M | 443.00M | Net Income Common Stockholders |
| 306.00M | 524.00M | 549.00M | 388.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||
| 2.92B | 2.21B | 1.64B | 0.00 | Total Assets |
| 7.93B | 6.87B | 6.51B | 0.00 | Total Debt |
| 226.00M | 219.00M | 261.00M | 0.00 | Net Debt |
| -1.70B | -1.33B | -743.00M | 0.00 | Total Liabilities |
| 2.63B | 2.81B | 2.96B | 0.00 | Stockholders Equity |
| 5.29B | 4.05B | 3.55B | 0.00 |
| Cash Flow | Free Cash Flow | ||
| 947.00M | 646.00M | 383.00M | 1.07B | Operating Cash Flow |
| 1.09B | 739.00M | 458.00M | 1.23B | Investing Cash Flow |
| -516.00M | -138.00M | -619.00M | -340.00M | Financing Cash Flow |
| -208.00M | -42.00M | -32.00M | -789.00M |
ARM Holdings PLC ADR Technical Analysis
Neutral
124.19
Price Trends
112.82
Positive
130.35
Negative
134.17
Negative
Market Momentum
3.04
Negative
63.38
Neutral
92.98
Negative
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 124.19 is above the 20-day moving average (MA) of 109.73, above the 50-day MA of 112.82, and below the 200-day MA of 134.17, indicating a neutral trend. The MACD of 3.04 indicates Negative momentum. The RSI at 63.38 is Neutral, neither overbought nor oversold. The STOCH value of 92.98 is Negative, 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 88 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
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $790.25B | 22.70 | 32.11% | 1.12% | 35.45% | ― | |
76 Outperform | $153.61B | 14.20 | 42.21% | 2.43% | 16.15% | 32.28% | |
75 Outperform | $159.47B | 98.31 | 3.90% | ― | 21.71% | 99.00% | |
71 Outperform | $129.05B | 161.55 | 14.11% | ― | 25.73% | 865.12% | |
71 Outperform | $98.50B | 63.33 | 4.43% | 1.92% | -19.28% | -44.00% | |
60 Neutral | $10.77B | 10.41 | -6.71% | 2.99% | 7.69% | -13.12% | |
43 Neutral | $86.98B | ― | -18.66% | 2.51% | -3.97% | -562.40% |
* Technology Sector Average
Performance Comparison
ARM
ARM Holdings PLC ADR
124.19
18.12
17.08%
AMD
Advanced Micro Devices
100.36
-53.26
-34.67%
ADI
Analog Devices
199.86
-1.66
-0.82%
INTC
Intel
20.31
-9.50
-31.87%
QCOM
Qualcomm
144.30
-32.70
-18.47%
TSM
TSMC
174.54
32.50
22.88%
ARM Holdings PLC ADR Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q4-2025)
| % Change Since: 0.00%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Arm's strong financial performance with record revenues and growth in both royalty and licensing revenue. The company's strategic advancements in AI and data centers were notable. However, macroeconomic uncertainties and the decision to withhold full-year guidance due to limited visibility cast some concerns.Q4-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Q4 revenue exceeded $1 billion for the first time in Arm's history. For the full year, revenue topped $4 billion, with royalty revenue surpassing $2 billion, marking a first for the company.
Strong Royalty Revenue Growth
Arm delivered record royalty revenue of $607 million in Q4, an 18% year-on-year increase, driven by strong demand across all major markets. Smartphone royalties jumped 30% year-on-year.
Significant Licensing Revenue
Licensing revenue hit an all-time high of $634 million in Q4, driven by new deals and a 50% year-on-year increase. This includes a multi-year AI partnership with the Malaysian government.
AI and Data Center Expansion
Arm expects up to 50% of new server chips at hyperscalers to be Arm-based. The company is seeing strong momentum in custom silicon and AI infrastructure.
Negative Updates
Macro Uncertainty and Tariffs
Arm expressed concerns over macro uncertainty and tariffs, which could indirectly impact royalty revenues. The company has limited visibility into the indirect impact on end demand.
Lack of Full Year Guidance
Arm did not issue full year guidance for fiscal 2026 due to uncertainty in the global trade and economic picture, citing less visibility from partners.
Company Guidance
During the Arm Q4 and fiscal year 2025 conference call, the company provided guidance that highlighted record-breaking financial performance driven by strong demand for power-efficient AI compute across various sectors. Arm achieved a milestone with Q4 revenue exceeding $1 billion, contributing to a full-year revenue of over $4 billion, with royalty revenue surpassing $2 billion. The company reported a record royalty of $607 million for Q4, attributing growth to broad-based adoption across major markets such as data center, automotive, smartphones, and IoT. Arm expects up to 50% of new server chips at hyperscalers to be Arm-based in the current year. For Q1 fiscal 2026, Arm anticipates revenue between $1.0 billion and $1.1 billion, with a strong 25% to 30% projected royalty growth. The company is not providing full-year guidance due to macroeconomic uncertainties but remains confident in healthy growth, driven by visibility into customer design pipelines and rising demand for custom silicon and AI solutions.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.