ARM (NASDAQ:ARM) Shares Up 1.1% - Here's Why

Key Points

• ARM shares rose 1.1% to $271.87 in midday trading, although volume was about 60% below the average session level.
• Analyst sentiment remains positive overall, with 18 Buy ratings, seven Holds and one Sell; the stock has a “Moderate Buy” consensus and an average price target of $285.33, despite recent target reductions from some firms.
• ARM reported a quarterly earnings beat, posting $0.45 in EPS versus $0.40 expected and $1.29 billion in revenue, up 22.4% year over year. Insiders sold approximately $41.1 million of stock over the past 90 days.

ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report)'s stock price shot up 1.1% on Wednesday . The company traded as high as $280.16 and last traded at $271.87. Approximately 3,341,352 shares were traded during mid-day trading, a decline of 60% from the average session volume of 8,395,000 shares. The stock had previously closed at $268.93.

Analyst Ratings Changes

A number of analysts have recently issued reports on ARM shares. Rosenblatt Securities dropped their price target on shares of ARM from $270.00 to $250.00 and set a "buy" rating on the stock in a report on Friday, July 31st. Weiss Ratings reissued a "hold (c)" rating on shares of ARM in a report on Friday, July 17th. KeyCorp increased their price objective on shares of ARM from $300.00 to $430.00 and gave the company an "overweight" rating in a research report on Tuesday, July 14th. TD Cowen dropped their target price on shares of ARM from $475.00 to $350.00 and set a "buy" rating on the stock in a report on Thursday, July 30th. Finally, Bank of America reaffirmed a "neutral" rating on shares of ARM in a research report on Thursday, July 30th. Eighteen research analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat.com, ARM currently has an average rating of "Moderate Buy" and an average price target of $285.33.

ARM Stock Up 1.1%

The firm has a market capitalization of $290.38 billion, a PE ratio of 280.28, a PEG ratio of 7.94 and a beta of 3.90. The stock's fifty day simple moving average is $318.03 and its 200 day simple moving average is $221.71.

ARM (NASDAQ:ARM - Get Free Report) last issued its quarterly earnings results on Thursday, July 30th. The company reported $0.45 earnings per share for the quarter, topping the consensus estimate of $0.40 by $0.05. ARM had a net margin of 20.25% and a return on equity of 12.24%. The business had revenue of $1.29 billion for the quarter, compared to analysts' expectations of $1.26 billion. During the same quarter last year, the company posted $0.35 EPS. The company's 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 EPS for the current year.

Insider Activity at ARM

In other ARM news, insider William Abbey sold 10,887 shares of the company's stock in a transaction dated Tuesday, May 19th. The stock was sold at an average price of $224.14, for a total value of $2,440,212.18. Following the completion of the sale, the insider owned 43,353 shares in the company, valued at $9,717,141.42. This represents a 20.07% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through this hyperlink. Also, CFO Jason Child sold 31,920 shares of the firm's stock in a transaction dated Wednesday, May 20th. The stock was sold at an average price of $226.54, for a total value of $7,231,156.80. Following the completion of the transaction, the chief financial officer directly owned 174,232 shares in the company, valued at $39,470,517.28. This trade represents a 15.48% 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. Insiders sold 164,088 shares of company stock valued at $41,099,903 in the last ninety days.

Institutional Investors Weigh In On ARM

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the company. GAMMA Investing LLC grew its holdings in shares of ARM by 18.7% in the second quarter. GAMMA Investing LLC now owns 406 shares of the company's stock valued at $144,000 after purchasing an additional 64 shares during the period. CreativeOne Wealth LLC raised its stake in ARM by 5.0% during the fourth quarter. CreativeOne Wealth LLC now owns 1,830 shares of the company's stock worth $200,000 after purchasing an additional 87 shares during the period. AdvisorNet Financial Inc raised its stake in ARM by 6.2% during the first quarter. AdvisorNet Financial Inc now owns 1,681 shares of the company's stock worth $254,000 after purchasing an additional 98 shares during the period. Moors & Cabot Inc. boosted its holdings in ARM by 5.3% in the 3rd quarter. Moors & Cabot Inc. now owns 2,050 shares of the company's stock valued at $290,000 after purchasing an additional 103 shares during the last quarter. Finally, Heritage Trust Co boosted its holdings in ARM by 5.5% in the 4th quarter. Heritage Trust Co now owns 2,045 shares of the company's stock valued at $224,000 after purchasing an additional 107 shares during the last quarter. 7.53% of the stock is owned by hedge funds and other institutional investors.

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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