Arm Holdings (ARM)
Technology · NASDAQ · US
Fundamentals
Valuation and ratings
Arm Holdings trades at $262.01, which is 64% above the $95.00 our discounted cash flow model puts on the business. On that measure it screens as expensive, which is not the same as saying it will fall.
Our moat model scores it 72 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 385.0 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Arm Holdings
Arm Holdings plc researches, develops, licenses, and markets central processing unit (CPU) intellectual property (IP), graphics processing unit IP, systems IP, compute subsystems (CSS), and associated software, tools and related services. The company provides a product portfolio, including CPU IP, GPU and neural processing unit (NPU) accelerators, system IP such as interconnects, compute platform products including pre-integrated CSSs, and development tools and software. The company serves semiconductor companies, original equipment manufacturers (OEMs), cloud service providers (CSPs), and organizations developing chips for end markets such as smartphones, consumer electronics, industrial IoT, embedded systems, cloud data centers, networking, automotive, and robotics. It provides its products and services in the United States, China, Japan, Taiwan, Korea, and internationally. The company was founded in 1990 and is based in Cambridge, United Kingdom. Arm Holdings plc operates as a subsidiary of SoftBank Group Corp.
ARM passes 4 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
12 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Capital Research Global, Capital Research Global Investors$638.05M · 0.1% of book
- Arrowstreet Capital, ARROWSTREET CAPITAL, LIMITED PARTNERSHIP$142.98M · 0.1% of book
- Baillie Gifford, BAILLIE GIFFORD & CO$92.57M · 0.1% of book
- Bridgewater Associates, LP$89.76M · 0.4% of book
- Two Sigma, TWO SIGMA INVESTMENTS, LP$87.75M · 0.1% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Arm Holdings (ARM) undervalued?
Against our discounted cash flow estimate of $95.00, ARM at $262.01 is 64% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own ARM?
12 of the institutions we track reported a position in ARM in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is ARM's P/E ratio?
ARM trades at 385.0 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for ARM, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.