ARM (NASDAQ:ARM) Stock Price Down 3.8% - What's Next?

Key Points

• Shares down 3.8% — ARM fell to an intraday low of $198.35 and last traded at $203.26, on about 6.63 million shares versus an average of ~7.30 million.
• Analyst outlook vs valuation — The consensus is a "Moderate Buy" (18 Buys, 6 Holds, 1 Sell) with a consensus target of $176.71, while the stock trades at a high valuation (PE ~271) and a market cap of ~$214.8 billion.
• Notable insider selling — CEO Rene A. Haas and CFO Jason Child sold shares in late March, and insiders have sold 83,712 shares (~$13.6M) over the past three months, reducing their holdings.

Shares of ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report) dropped 3.8% during mid-day trading on Monday . The stock traded as low as $198.35 and last traded at $203.26. Approximately 6,630,102 shares changed hands during trading, a decline of 9% from the average daily volume of 7,295,441 shares. The stock had previously closed at $211.18.

Analyst Upgrades and Downgrades

ARM has been the subject of several recent research reports. Susquehanna lifted their target price on shares of ARM from $170.00 to $210.00 and gave the company a "positive" rating in a report on Thursday, April 16th. KeyCorp reiterated an "overweight" rating on shares of ARM in a research note on Thursday, February 5th. Royal Bank Of Canada raised their price objective on shares of ARM from $130.00 to $175.00 and gave the company an "outperform" rating in a research note on Wednesday, March 25th. Raymond James Financial upgraded shares of ARM from a "market perform" rating to an "outperform" rating and set a $166.00 target price on the stock in a research note on Wednesday, March 25th. Finally, Evercore cut their price target on shares of ARM from $215.00 to $170.00 and set an "outperform" rating on the stock in a report on Thursday, February 5th. Eighteen 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 company's stock. According to data from MarketBeat.com, ARM has a consensus rating of "Moderate Buy" and a consensus target price of $176.71.

ARM Price Performance

The firm has a 50-day moving average of $148.60 and a 200 day moving average of $137.34. The company has a market capitalization of $214.75 billion, a PE ratio of 271.01, a PEG ratio of 9.52 and a beta of 3.40.

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

Insider Buying and Selling

In other ARM news, CEO Rene A. Haas sold 23,867 shares of the stock in a transaction that occurred on Wednesday, March 25th. The shares were sold at an average price of $161.17, for a total value of $3,846,644.39. Following the transaction, the chief executive officer directly owned 290,965 shares in the company, valued at approximately $46,894,829.05. This trade represents a 7.58% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CFO Jason Child sold 21,280 shares of ARM stock in a transaction on Wednesday, March 25th. The stock was sold at an average price of $148.37, for a total transaction of $3,157,313.60. Following 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 SEC filing for this sale provides additional information. In the last three months, insiders sold 83,712 shares of company stock worth $13,614,730.

Hedge Funds Weigh In On ARM

Institutional investors have recently bought and sold shares of the stock. Grey Fox Wealth Advisors LLC purchased a new stake in ARM in the third quarter worth about $28,000. Syntax Research Inc. purchased a new position in shares of ARM during the 1st quarter valued at about $30,000. FWL Investment Management LLC bought a new position in shares of ARM during the 2nd quarter valued at approximately $34,000. Mcguire Capital Advisors Inc. purchased a new stake in ARM in the 4th quarter worth approximately $30,000. Finally, Strategic Investment Solutions Inc. IL raised its stake in ARM by 238.1% during the 3rd quarter. Strategic Investment Solutions Inc. IL now owns 284 shares of the company's stock worth $40,000 after acquiring an additional 200 shares during the period. 7.53% of the stock is owned by 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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