ARM (NASDAQ:ARM) Reaches New 1-Year High - Still a Buy?

Key Points

• ARM reached a new 52‑week high, trading as high as $187.29 (last $184.97) on heavy volume and is up about 10.9%, giving it a market cap around $205.6 billion.
• Analyst sentiment is largely positive — 18 Buys, 6 Holds and 1 Sell — with a consensus target of $174.83 and an average rating of Moderate Buy.
• ARM beat the quarter (EPS $0.43 vs. $0.41; revenue $1.24B, +26.3% YoY) but carries a high valuation (P/E ~260, PEG ~7.9) and insiders have sold roughly 62,432 shares (~$9.8M) in the past 90 days.

Shares of ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report) reached a new 52-week high on Wednesday . The company traded as high as $187.29 and last traded at $184.9690, with a volume of 3787056 shares trading hands. The stock had previously closed at $175.49.

Wall Street Analyst Weigh In

A number of research firms recently commented on ARM. KeyCorp reaffirmed an "overweight" rating on shares of ARM in a research note on Thursday, February 5th. Barclays restated an "overweight" rating and set a $165.00 target price on shares of ARM in a research report on Thursday, March 26th. Bank of America reiterated a "neutral" rating and issued a $120.00 price target on shares of ARM in a report on Tuesday, January 13th. Evercore dropped their price objective on ARM from $215.00 to $170.00 and set an "outperform" rating for the company in a report on Thursday, February 5th. Finally, Morgan Stanley reaffirmed an "equal weight" rating and issued a $150.00 price objective (up from $135.00) on shares of ARM in a research report on Tuesday, April 7th. Eighteen analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has issued a Sell rating to the company. According to MarketBeat, ARM currently has an average rating of "Moderate Buy" and a consensus target price of $174.83.

ARM Stock Up 10.9%

The firm has a 50 day moving average of $136.93 and a 200-day moving average of $135.13. The company has a market cap of $205.63 billion, a P/E ratio of 259.82, a PEG ratio of 7.89 and a beta of 3.33.

ARM (NASDAQ:ARM - Get Free Report) last issued its earnings results on Thursday, February 5th. The company reported $0.43 earnings per share for the quarter, beating analysts' consensus estimates of $0.41 by $0.02. ARM had a return on equity of 14.01% and a net margin of 17.15%.The business had revenue of $1.24 billion during the quarter, compared to analyst estimates of $1.23 billion. During the same period in the previous year, the company posted $0.39 EPS. ARM's revenue was up 26.3% on a year-over-year basis. On average, research analysts predict that ARM Holdings PLC Sponsored ADR will post 0.85 EPS for the current fiscal year.

Insider Transactions at ARM

In other news, CFO Jason Child sold 21,280 shares of the company's stock in a transaction that occurred on Wednesday, March 25th. The shares were sold at an average price of $148.37, for a total value of $3,157,313.60. Following the completion of the sale, the chief financial officer owned 174,706 shares of the company's stock, valued at approximately $25,921,129.22. This represents a 10.86% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, CEO Rene A. Haas sold 9,299 shares of the stock in a transaction that occurred on Tuesday, April 14th. The shares were sold at an average price of $160.85, for a total transaction of $1,495,744.15. Following the transaction, the chief executive officer owned 273,680 shares in the company, valued at approximately $44,021,428. This represents a 3.29% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders sold 62,432 shares of company stock valued at $9,784,330.

Institutional Trading of ARM

Hedge funds have recently bought and sold shares of the stock. GAMMA Investing LLC increased its holdings in shares of ARM by 126.0% in the 3rd quarter. GAMMA Investing LLC now owns 174 shares of the company's stock valued at $25,000 after acquiring an additional 97 shares during the period. Grey Fox Wealth Advisors LLC bought a new stake in ARM during the third quarter valued at about $28,000. FWL Investment Management LLC purchased a new position in ARM in the second quarter valued at about $34,000. Mcguire Capital Advisors Inc. purchased a new position in ARM in the fourth quarter valued at about $30,000. Finally, Strategic Investment Solutions Inc. IL raised its holdings in ARM by 238.1% in the third quarter. Strategic Investment Solutions Inc. IL now owns 284 shares of the company's stock worth $40,000 after purchasing an additional 200 shares in the last quarter. Hedge funds and other institutional investors own 7.53% of the company's stock.

About ARM

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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