ARM (NASDAQ:ARM) Shares Down 3% - Here's What Happened

Key Points

• ARM shares fell 3% to about $243.32 in Friday trading, with volume roughly 55% below the average daily level. The stock remains highly valued, with a P/E ratio above 250 and a beta of 3.90.
• Analysts remain broadly bullish: 18 rate ARM a Buy, seven recommend Hold and one rates it Sell. The consensus rating is “Moderate Buy,” with an average price target of $285.33, although several firms recently lowered their targets.
• ARM exceeded quarterly expectations, reporting $0.45 in EPS and $1.29 billion in revenue, up 22.4% year over year. However, insiders sold 22,072 shares worth approximately $8.5 million during the last quarter.

ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report) fell 3% during trading on Friday . The stock traded as low as $242.50 and last traded at $243.32. Approximately 3,675,295 shares were traded during mid-day trading, a decline of 55% from the average daily volume of 8,201,083 shares. The stock had previously closed at $250.72.

Wall Street Analysts Forecast Growth

A number of equities analysts recently commented on ARM shares. TD Cowen dropped their price objective on ARM from $475.00 to $350.00 and set a "buy" rating on the stock in a report on Thursday, July 30th. Benchmark began coverage on shares of ARM in a research note on Thursday, July 16th. They issued a "hold" rating for the company. Rosenblatt Securities decreased their target price on shares of ARM from $270.00 to $250.00 and set a "buy" rating for the company in a research report on Friday, July 31st. Needham & Company LLC restated a "buy" rating and set a $255.00 price target on shares of ARM in a research note on Thursday, July 30th. Finally, Susquehanna raised their price target on shares of ARM from $300.00 to $320.00 and gave the company a "positive" rating in a report on Tuesday, July 21st. Eighteen equities research analysts have rated the stock with a Buy rating, seven have issued a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat, ARM currently has an average rating of "Moderate Buy" and a consensus target price of $285.33.

ARM Stock Down 3.0%

The business has a 50-day simple moving average of $305.75 and a 200-day simple moving average of $229.22. The stock has a market cap of $259.88 billion, a P/E ratio of 250.85, a PEG ratio of 7.39 and a beta of 3.90.

ARM (NASDAQ:ARM - Get Free Report) last released its quarterly earnings results on Thursday, July 30th. The company reported $0.45 EPS for the quarter, beating analysts' consensus estimates of $0.40 by $0.05. ARM had a net margin of 20.25% and a return on equity of 12.24%. The company had revenue of $1.29 billion for the quarter, compared to analyst estimates of $1.26 billion. During the same quarter last year, the firm posted $0.35 earnings per share. The company's quarterly revenue was up 22.4% compared to the same quarter last year. On average, analysts predict that ARM Holdings PLC Sponsored ADR will post 1.15 earnings per share for the current fiscal year.

Insider Buying and Selling at ARM

In other ARM news, insider William Abbey sold 6,566 shares of the company's stock in a transaction dated Monday, June 1st. The shares were sold at an average price of $402.72, for a total transaction of $2,644,259.52. Following the completion of the sale, the insider directly owned 20,563 shares in the company, valued at $8,281,131.36. This represents a 24.20% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CAO Laura Kathleen Bartels sold 11,306 shares of the firm's stock in a transaction dated Tuesday, June 2nd. The shares were sold at an average price of $392.70, for a total value of $4,439,866.20. Following the completion of the sale, the chief accounting officer directly owned 12,135 shares in the company, valued at approximately $4,765,414.50. This represents a 48.23% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold a total of 22,072 shares of company stock worth $8,528,128 in the last quarter.

Institutional Trading of ARM

Several hedge funds have recently added to or reduced their stakes in ARM. Northwestern Mutual Wealth Management Co. boosted its holdings in ARM by 2,623.5% in the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 1,671,787 shares of the company's stock valued at $182,743,000 after purchasing an additional 1,610,403 shares during the period. Employees Provident Fund Board bought a new position in shares of ARM during the 4th quarter worth about $120,241,000. Arrowstreet Capital Limited Partnership increased its holdings in shares of ARM by 1,203.5% during the 1st quarter. Arrowstreet Capital Limited Partnership now owns 945,152 shares of the company's stock worth $142,983,000 after purchasing an additional 872,644 shares during the period. Janus Henderson Group PLC acquired a new position in shares of ARM during the first quarter valued at about $116,112,000. Finally, SG Americas Securities LLC raised its position in shares of ARM by 265.6% during the first quarter. SG Americas Securities LLC now owns 971,067 shares of the company's stock valued at $146,903,000 after buying an additional 705,459 shares during the last quarter. Institutional investors own 7.53% of the company's stock.

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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