TD Cowen analyst Krish Sankar maintained a Buy rating on ARM Holdings PLC ADR (ARM – Research Report) today and set a price target of $155.00.
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Krish Sankar’s rating is based on ARM Holdings PLC’s strong fundamentals and potential for growth despite some conservative guidance. The company’s revenue and earnings per share for the March quarter were near the high end of its previous guidance, demonstrating solid performance. However, the guidance for the June quarter was below consensus forecasts, which is attributed to uncertainties in customer demand and macroeconomic conditions. Despite this, the fundamentals in Licensing and Royalties remain robust, with significant year-over-year growth.
ARM’s strategic focus on research and development is expected to support future growth, although it may limit earnings per share growth in the near term. The adoption of ARMv9 technology is increasing, which is promising for future royalty income. Additionally, while there is a projected decline in licensing revenue for the upcoming quarter, this is seen as a normalization following a period of high-value deals. Overall, the potential for upside in the latter half of the fiscal year, particularly related to AI and cloud-based designs, supports the Buy rating.
According to TipRanks, Sankar is a 5-star analyst with an average return of 13.3% and a 48.99% success rate. Sankar covers the Technology sector, focusing on stocks such as Apple, Pure Storage, and Cohu.
In another report released today, Citi also maintained a Buy rating on the stock with a $170.00 price target.