ARM (NASDAQ:ARM) Posts Earnings Results, Beats Estimates By $0.05 EPS

Key Points

• ARM beat quarterly expectations: The company reported adjusted earnings of $0.45 per share, $0.05 above consensus, while revenue reached $1.29 billion versus the $1.26 billion estimate.
• Management updated its Q2 2027 outlook to earnings of $0.43–$0.51 per share. Despite the earnings beat, ARM shares fell $19.85 to $224.89 during Wednesday trading.
• Wall Street remains broadly positive: Seventeen analysts rate ARM a Buy, with a consensus “Moderate Buy” rating and a $297.65 price target, while insiders have sold approximately $52.1 million of stock over the past 90 days.

ARM (NASDAQ:ARM - Get Free Report) posted its quarterly earnings data on Wednesday. The company reported $0.45 earnings per share for the quarter, beating the consensus estimate of $0.40 by $0.05, FiscalAI reports. ARM had a net margin of 18.37% and a return on equity of 12.43%. The firm had revenue of $1.29 billion for the quarter, compared to analysts' expectations of $1.26 billion. ARM updated its Q2 2027 guidance to 0.430-0.510 EPS.

ARM Price Performance

ARM stock traded down $19.85 during mid-day trading on Wednesday, hitting $224.89. The company's stock had a trading volume of 9,070,723 shares, compared to its average volume of 8,574,409. The business has a 50 day moving average price of $331.72 and a 200-day moving average price of $211.00. ARM has a 12 month low of $100.02 and a 12 month high of $452.70. The stock has a market cap of $240.20 billion, a price-to-earnings ratio of 267.73, a price-to-earnings-growth ratio of 8.28 and a beta of 3.76.

Insider Transactions at ARM

In other news, insider Richard Roy Grisenthwaite sold 24,339 shares of the business's stock in a transaction dated Monday, May 18th. The stock was sold at an average price of $209.15, for a total value of $5,090,501.85. Following the completion of the sale, the insider owned 5,543 shares of the company's stock, valued at approximately $1,159,318.45. The trade was a 81.45% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Jason Child sold 31,920 shares of the stock in a transaction dated Wednesday, May 20th. The shares were sold at an average price of $226.54, for a total value of $7,231,156.80. Following the sale, the chief financial officer owned 174,232 shares of the company's stock, valued at $39,470,517.28. This represents a 15.48% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 216,049 shares of company stock valued at $52,101,605.

Institutional Inflows and Outflows

Hedge funds have recently made changes to their positions in the company. Morgan Stanley raised its holdings in ARM by 1.2% during the 4th quarter. Morgan Stanley now owns 3,783,006 shares of the company's stock valued at $413,521,000 after buying an additional 45,314 shares during the last quarter. Invesco Ltd. increased its position in shares of ARM by 36.9% in the fourth quarter. Invesco Ltd. now owns 2,426,850 shares of the company's stock valued at $265,279,000 after acquiring an additional 654,727 shares during the period. Coatue Management LLC raised its stake in shares of ARM by 1.8% during the fourth quarter. Coatue Management LLC now owns 2,300,000 shares of the company's stock valued at $251,413,000 after acquiring an additional 40,174 shares during the last quarter. Wellington Management Group LLP boosted its holdings in shares of ARM by 41.6% during the fourth quarter. Wellington Management Group LLP now owns 2,149,159 shares of the company's stock worth $234,925,000 after purchasing an additional 631,576 shares during the period. Finally, Schroder Investment Management Group grew its stake in shares of ARM by 11.0% in the fourth quarter. Schroder Investment Management Group now owns 1,891,310 shares of the company's stock worth $206,739,000 after purchasing an additional 187,035 shares during the last quarter. 7.53% of the stock is owned by hedge funds and other institutional investors.

Wall Street Analysts Forecast Growth

A number of research analysts recently commented on ARM shares. Morgan Stanley reissued an "equal weight" rating and issued a $150.00 target price (up from $135.00) on shares of ARM in a research note on Tuesday, April 7th. KeyCorp lifted their price target on ARM from $300.00 to $430.00 and gave the stock an "overweight" rating in a research note on Tuesday, July 14th. Susquehanna upped their price objective on ARM from $300.00 to $320.00 and gave the stock a "positive" rating in a report on Tuesday, July 21st. Barclays increased their price objective on ARM from $250.00 to $360.00 and gave the company an "overweight" rating in a research report on Monday, June 1st. Finally, Bank of America raised their price objective on ARM from $335.00 to $460.00 and gave the company a "neutral" rating in a report on Tuesday, June 23rd. Seventeen analysts have rated the stock with a Buy rating, eight have issued a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat, the company currently has a consensus rating of "Moderate Buy" and a consensus price target of $297.65.

ARM Company Profile

Arm Limited NASDAQ: ARM is a global semiconductor IP company best known for designing energy-efficient processor architectures and related technologies that underpin a wide range of computing devices. Founded in 1990 as a joint venture between Acorn Computers, Apple and VLSI Technology and headquartered in Cambridge, England, Arm develops the ARM instruction set architectures and core processor designs that chipmakers license and integrate into custom system-on-chip (SoC) products. The company operates a licensing and royalty business model rather than manufacturing chips itself.

Arm's product portfolio includes CPU core families (such as Cortex and Neoverse lines), GPU and multimedia IP (Mali), neural processing units (Ethos) and a suite of system and physical IP blocks.

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