ARM (NASDAQ:ARM) Shares Down 8.1% - Should You Sell?

Key Points

• ARM shares fell 8.1% intraday to $215.88 on heavy trading (≈13.76M shares, about 90% above average), leaving the stock notably above the analysts' average target of $174.83.
• Several firms trimmed price targets this week but the consensus rating stays a "Moderate Buy" (18 Buys, 6 Holds, 1 Sell).
• Insiders including the CEO and CFO sold shares in late March (insiders sold 83,712 shares worth roughly $13.6M in the last quarter), even as ARM posted a slight quarterly beat (EPS $0.43 vs $0.41) and 26% revenue growth year-over-year.

Shares of ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report) dropped 8.1% on Monday . The stock traded as low as $210.00 and last traded at $215.88. Approximately 13,764,096 shares traded hands during trading, an increase of 90% from the average daily volume of 7,262,272 shares. The stock had previously closed at $234.81.

Wall Street Analysts Forecast Growth

ARM has been the subject of several recent research reports. UBS Group lowered their target price on shares of ARM from $175.00 to $170.00 and set a "buy" rating for the company in a research note on Thursday, February 5th. TD Cowen lowered their price target on shares of ARM from $190.00 to $165.00 and set a "buy" rating for the company in a research report on Thursday, February 5th. KeyCorp restated an "overweight" rating on shares of ARM in a research report on Thursday, February 5th. Jefferies Financial Group set a $170.00 price target on shares of ARM in a research report on Thursday, February 5th. Finally, Benchmark restated a "hold" rating on shares of ARM in a research report on Thursday, February 5th. Eighteen equities research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, the stock has a consensus rating of "Moderate Buy" and an average target price of $174.83.

ARM Stock Down 8.1%

The firm's 50-day moving average price is $142.19 and its 200 day moving average price is $136.21. The firm has a market cap of $228.08 billion, a P/E ratio of 287.84, a price-to-earnings-growth ratio of 10.58 and a beta of 3.33.

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

Insider Transactions at ARM

In related news, CFO Jason Child sold 21,280 shares of the stock in a transaction dated 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 transaction, the chief financial officer owned 174,706 shares in the company, valued at $25,921,129.22. This represents a 10.86% decrease in their position. The sale was disclosed in a filing with the SEC, which is available at this hyperlink. Also, CEO Rene A. Haas sold 23,867 shares of the stock in a transaction dated Wednesday, March 25th. The shares were sold at an average price of $161.17, for a total transaction of $3,846,644.39. Following the completion of the transaction, the chief executive officer owned 290,965 shares of the company's stock, valued at $46,894,829.05. This represents a 7.58% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 83,712 shares of company stock valued at $13,614,730 in the last quarter.

Hedge Funds Weigh In On ARM

A number of institutional investors and hedge funds have recently bought and sold shares of the stock. Compound Planning Inc. lifted its position in shares of ARM by 4.6% in the third quarter. Compound Planning Inc. now owns 1,569 shares of the company's stock worth $222,000 after purchasing an additional 69 shares in the last quarter. Ritholtz Wealth Management lifted its position in shares of ARM by 3.0% in the third quarter. Ritholtz Wealth Management now owns 2,439 shares of the company's stock worth $345,000 after purchasing an additional 70 shares in the last quarter. Rathbones Group PLC lifted its position in shares of ARM by 0.7% in the third quarter. Rathbones Group PLC now owns 10,552 shares of the company's stock worth $1,493,000 after purchasing an additional 70 shares in the last quarter. Nwam LLC lifted its position in shares of ARM by 4.3% in the third quarter. Nwam LLC now owns 1,711 shares of the company's stock worth $242,000 after purchasing an additional 71 shares in the last quarter. Finally, Kovack Advisors Inc. lifted its position in shares of ARM by 2.0% in the third quarter. Kovack Advisors Inc. now owns 3,602 shares of the company's stock worth $510,000 after purchasing an additional 72 shares in 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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