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ARM Holdings PLC ADR
(NASDAQ:ARM)
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Rating:73Outperform
Price Target:
$315.00
▲(21.15% Upside)
Action:Upgraded
Date:07/31/26
The score is driven primarily by strong financial performance (premium margins, robust cash generation, and very low leverage) and a constructive earnings outlook (record results, ~22% YoY revenue guidance, and strengthening AGI CPU demand). These positives are partially offset by weak near-term technical positioning (below key moving averages) and a highly demanding valuation (very high P/E with no dividend support), alongside near-term risks highlighted on the call (smartphone softness, supply constraints, and initially lower AGI CPU margins).
Positive Factors
High-margin, capital-light model
Arm's licensing-and-royalty business yields extremely high gross margins and minimal manufacturing capital needs, creating durable operating leverage. This model supports strong long-term free cash flow generation and allows investment in R&D and ecosystem expansion without heavy capex burdens.
Negative Factors
Smartphone royalty cyclicality
Smartphone demand and BOM cost swings remain a persistent headwind for royalty growth because handsets are still a meaningful royalty base. Cyclical softness or higher component costs can depress near- and medium-term royalty volumes and make overall revenue growth more volatile.
Read all positive and negative factors
Positive Factors
Negative Factors
High-margin, capital-light model
Arm's licensing-and-royalty business yields extremely high gross margins and minimal manufacturing capital needs, creating durable operating leverage. This model supports strong long-term free cash flow generation and allows investment in R&D and ecosystem expansion without heavy capex burdens.
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
$255.99B
Dividend YieldN/A
Average Volume (3M)8.23M
Price to Earnings (P/E)247.1
Beta (1Y)2.56
Revenue Growth25.12%
EPS Growth48.03%
CountryUS
Employees9,584
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.97
Shares Outstanding1,064,055,300
10 Day Avg. Volume5,706,298
30 Day Avg. Volume8,228,251
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$301.06Price Target Upside15.79% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering20
EPS Forecast (FY)2.23
Revenue Forecast (FY)$6.06B
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 through licensing its semiconductor IP and collecting royalties on chips that incorporate that IP. (1) License revenue: Customers (typically semiconductor companies and, in some cases, large system companies) pay upfront ...
ARM Holdings PLC ADR Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call was largely positive: Arm reported record Q1 results across revenue, royalties, licensing and EPS, strong data center momentum (double-digit to >100% YoY growth in key areas), accelerating adoption of Arm in AI infrastructure, and meaningful traction for the new Arm AGI CPU with demand exceeding earlier expectations. Near-term cautions include smartphone market softness (memory-driven BOM pressure) moderating royalty growth, supply-chain constraints for the AGI CPU ramp, and initially lower AGI CPU margins. Overall, the favorable operating results, robust cash generation, expanding ecosystem and strengthened AGI CPU demand materially outweigh the cited near-term headwinds.Positive Updates
Record Revenue and Strong Top-Line Growth
Total revenue reached $1.29 billion, up 22% year-over-year (Q1 FY27), the highest first-quarter revenue in company history.
Negative Updates
Smartphone Market Weakness and Memory-Driven BOM Pressure
Smartphone end market softness driven by higher memory prices raised handset BOMs; this has caused an incremental slowdown in smartphone-related royalties versus initial expectations.
Read all updates
Q1-2027 Updates
Positive
Negative
Record Revenue and Strong Top-Line Growth
Total revenue reached $1.29 billion, up 22% year-over-year (Q1 FY27), the highest first-quarter revenue in company history.
Read all positive updates
Company Guidance
Arm's Q2 guidance calls for revenue of $1.38 billion ± $50 million (midpoint ≈ 22% year‑over‑year), with license and other revenue expected to rise about 30% YoY and royalty revenue to grow in the low‑teens YoY; non‑GAAP operating expense is pegged at roughly $780 million and non‑GAAP EPS is $0.47 ± $0.04. Management reiterated confidence in the Arm AGI CPU opportunity (initial $1 billion target, demand now north of $2 billion) and said AGI CPU first‑generation gross margins are expected in the high‑30s to low‑40s range with a path to ~50% over a couple of years, will provide a more detailed revenue/margin update at Q3, and will begin breaking out silicon revenue once it reaches ~10% of total (expected in FY‑28); they also noted a ~$200 million quarterly license run‑rate (excluding a $193M SoftBank contribution this quarter).ARM Holdings PLC ADR Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
92
Very Positive
Cash Flow
84
Very Positive
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.16B | 4.92B | 4.01B | 3.23B | 2.68B | 2.70B |
| Gross Profit | 4.92B | 4.55B | 3.80B | 3.00B | 2.48B | 2.48B |
| EBITDA | 1.37B | 1.41B | 902.90M | 374.00M | 841.20M | 962.50M |
| Net Income | 1.04B | 904.00M | 792.00M | 306.00M | 524.00M | 549.00M |
Balance Sheet | ||||||
| Total Assets | 11.20B | 10.70B | 8.93B | 7.93B | 6.87B | 6.51B |
| Cash, Cash Equivalents and Short-Term Investments | 3.89B | 3.60B | 2.83B | 2.92B | 2.21B | 1.64B |
| Total Debt | 464.00M | 457.00M | 356.00M | 226.00M | 219.00M | 261.00M |
| Total Liabilities | 2.57B | 2.42B | 2.09B | 2.63B | 2.81B | 2.96B |
| Stockholders Equity | 8.63B | 8.29B | 6.84B | 5.29B | 4.05B | 3.55B |
Cash Flow | ||||||
| Free Cash Flow | 1.47B | 979.00M | 178.00M | 947.00M | 646.00M | 383.00M |
| Operating Cash Flow | 2.09B | 1.52B | 397.00M | 1.09B | 739.00M | 458.00M |
| Investing Cash Flow | -220.00M | -325.00M | -35.00M | -516.00M | -138.00M | -619.00M |
| Financing Cash Flow | -751.00M | -548.00M | -202.00M | -208.00M | -42.00M | -32.00M |
ARM Holdings PLC ADR Technical Analysis
Positive
260.01
Price Trends
322.21
Negative
255.99
Positive
192.46
Positive
Market Momentum
-11.43
Negative
50.34
Neutral
82.24
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 260.01 is below the 20-day moving average (MA) of 267.64, below the 50-day MA of 322.21, and above the 200-day MA of 192.46, indicating a neutral trend. The MACD of -11.43 indicates Negative momentum. The RSI at 50.34 is Neutral, neither overbought nor oversold. The STOCH value of 82.24 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 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 |
|---|---|---|---|---|---|---|---|
75 Outperform | $57.79B | 19.45 | 28.05% | 1.51% | 2.37% | 13.28% | |
74 Outperform | $776.41B | 154.59 | 8.08% | ― | 34.97% | 123.87% | |
73 Outperform | $255.99B | 247.10 | 13.00% | ― | 25.12% | 48.03% | |
71 Outperform | $251.82B | 41.72 | 35.77% | 2.01% | 16.66% | 20.14% | |
69 Neutral | $154.99B | 16.81 | 37.33% | 2.15% | 1.87% | -16.70% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
52 Neutral | $454.97B | -42.75 | -10.76% | ― | 7.47% | 55.56% |
* Technology Sector Average
ARM
ARM Holdings PLC ADR
282.57
144.07
104.02%
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ARM Holdings PLC ADR Corporate Events
Arm Holdings Releases Q1 FY2027 Results and Hosts Shareholder Webcast
Jul 29, 2026
Arm Holdings plc has released its results for the first quarter of fiscal year 2027, covering the period ended June 30, 2026, via a shareholder letter published on July 29, 2026. The letter, made available on the company’s investor relations...
Arm Holdings Files June 30, 2026 Quarterly Report Highlighting Key Industry Risks
Jul 29, 2026
Arm Holdings plc has furnished a Form 6-K quarterly report to the U.S. SEC for the three months ended June 30, 2026, providing unaudited condensed consolidated financial statements and management’s discussion and analysis. The filing highlig...
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.