ARM (NASDAQ:ARM) Shares Gap Up on Analyst Upgrade

Key Points

• Mizuho raised its price target to $255, sparking a gap-up open (previous close $208.84 to $232.00) and sending ARM shares higher — last trade noted around $224.57, up roughly 5.6% on heavy volume.
• Multiple brokerages also boosted targets (e.g., Guggenheim to $240) and ratings, leaving ARM with a consensus of "Moderate Buy" from analysts (18 Buys, 6 Holds, 1 Sell) and an average price target of $177.75.
• Insiders have been net sellers recently: the CFO sold 21,280 shares and the CEO sold 9,299 shares under pre-arranged Rule 10b5-1 plans, and insiders sold a total of 83,712 shares worth $13.6M in the last 90 days.

ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report)'s share price gapped up prior to trading on Wednesday after Mizuho raised their price target on the stock from $230.00 to $255.00. The stock had previously closed at $208.84, but opened at $232.00. Mizuho currently has an outperform rating on the stock. ARM shares last traded at $224.5720, with a volume of 4,023,175 shares traded.

Several other brokerages also recently issued reports on ARM. Guggenheim boosted their price target on shares of ARM from $201.00 to $240.00 and gave the company a "buy" rating in a report on Wednesday, March 25th. Deutsche Bank Aktiengesellschaft lifted their price objective on shares of ARM from $125.00 to $140.00 and gave the company a "hold" rating in a research note on Wednesday, March 25th. Rosenblatt Securities reiterated a "buy" rating and issued a $175.00 price target on shares of ARM in a research report on Wednesday, March 25th. New Street Research upgraded shares of ARM from a "neutral" rating to a "buy" rating in a research report on Thursday, February 5th. Finally, Raymond James Financial upgraded ARM from a "market perform" rating to an "outperform" rating and set a $166.00 price objective on the stock in a report on Wednesday, March 25th. Eighteen equities research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and an average price target of $177.75.

Insider Activity

In other news, CFO Jason Child sold 21,280 shares of the company's stock in a transaction dated Wednesday, April 22nd. The stock was sold at an average price of $180.00, for a total value of $3,830,400.00. Following the transaction, the chief financial officer owned 153,426 shares in the company, valued at $27,616,680. This represents a 12.18% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Rene A. Haas sold 9,299 shares of the company's stock in a transaction dated Tuesday, April 14th. The shares were sold at an average price of $160.85, for a total value of $1,495,744.15. Following the completion of the transaction, the chief executive officer owned 273,680 shares in the company, valued at $44,021,428. This represents a 3.29% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 83,712 shares of company stock worth $13,614,730.

Hedge Funds Weigh In On ARM

A number of large investors have recently made changes to their positions in the business. SteelPeak Wealth LLC acquired a new position in shares of ARM in the 1st quarter valued at about $320,000. Independent Financial Group LLC acquired a new position in shares of ARM in the 1st quarter valued at about $1,377,000. Westover Capital Advisors LLC acquired a new position in shares of ARM in the 1st quarter valued at about $272,000. Wealthfront Advisers LLC acquired a new position in shares of ARM in the 1st quarter valued at about $394,000. Finally, D.A. Davidson & CO. increased its holdings in shares of ARM by 527.9% in the 1st quarter. D.A. Davidson & CO. now owns 13,506 shares of the company's stock valued at $2,043,000 after purchasing an additional 11,355 shares during the period. Institutional investors and hedge funds own 7.53% of the company's stock.

ARM Trading Up 5.6%

The company has a market cap of $233.02 billion, a price-to-earnings ratio of 296.38, a P/E/G ratio of 9.16 and a beta of 3.40. The business has a fifty day moving average price of $150.26 and a two-hundred day moving average price of $137.61.

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. The company had revenue of $1.24 billion for the quarter, compared to the consensus estimate of $1.23 billion. ARM had a return on equity of 14.01% and a net margin of 17.15%.The firm's quarterly revenue was up 26.3% on a year-over-year basis. During the same quarter in the prior year, the company earned $0.39 EPS. On average, analysts anticipate that ARM Holdings PLC Sponsored ADR will post 0.85 EPS for the current year.

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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