ARM (NASDAQ:ARM) Stock Price Up 12% - Time to Buy?

Key Points

• Shares jumped 12% on Wednesday to $196.57 with volume up 102% versus average, leaving ARM well above its 50- and 200-day moving averages and giving it a market cap of about $207.7 billion.
• Analysts are mixed but overall cautious — the consensus is a Moderate Buy with a $174.83 average price target (18 Buys, 6 Holds, 1 Sell), while individual targets range from cuts to upgrades (HSBC raised to a $205 target).
• Insiders sold stock recently (62,432 shares worth ~$9.8M), even as ARM reported a quarterly EPS beat and 26.3% revenue growth year-over-year; however the stock trades at a high P/E of 262.09, implying lofty expectations.

ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report) shares traded up 12% during trading on Wednesday . The stock traded as high as $196.66 and last traded at $196.57. 13,842,461 shares changed hands during trading, an increase of 102% from the average session volume of 6,863,089 shares. The stock had previously closed at $175.49.

Analysts Set New Price Targets

Several equities research analysts have recently issued reports on the company. Raymond James Financial raised ARM from a "market perform" rating to an "outperform" rating and set a $166.00 target price on the stock in a report on Wednesday, March 25th. The Goldman Sachs Group raised their price target on ARM from $110.00 to $125.00 and gave the company a "sell" rating in a report on Thursday, April 9th. Deutsche Bank Aktiengesellschaft lifted their price objective on ARM from $125.00 to $140.00 and gave the stock a "hold" rating in a research note on Wednesday, March 25th. HSBC raised ARM from a "reduce" rating to a "buy" rating and upped their price objective for the stock from $90.00 to $205.00 in a report on Friday, March 20th. Finally, JPMorgan Chase & Co. cut their target price on shares of ARM from $180.00 to $145.00 and set an "overweight" rating for the company 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 stock. According to MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and a consensus price target of $174.83.

ARM Trading Up 12.0%

The firm has a market capitalization of $207.68 billion, a P/E ratio of 262.09, a price-to-earnings-growth ratio of 7.89 and a beta of 3.33. The firm has a 50 day moving average price of $136.93 and a 200-day moving average price of $135.13.

ARM (NASDAQ:ARM - Get Free Report) last released its earnings results on Thursday, February 5th. The company reported $0.43 earnings per share for the quarter, beating the consensus estimate of $0.41 by $0.02. The firm 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 company's revenue for the quarter was up 26.3% compared to the same quarter last year. During the same quarter in the previous year, the company posted $0.39 EPS. Research analysts anticipate that ARM Holdings PLC Sponsored ADR will post 0.85 earnings per share for the current year.

Insiders Place Their Bets

In other news, CFO Jason Child sold 21,280 shares of the stock in a transaction on 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 sale, the chief financial officer owned 174,706 shares of the company's stock, valued at approximately $25,921,129.22. This represents a 10.86% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, CEO Rene A. Haas sold 23,867 shares of the firm's stock in a transaction dated Wednesday, March 25th. The stock was sold at an average price of $161.17, for a total transaction of $3,846,644.39. Following the completion of the sale, the chief executive officer owned 290,965 shares of the company's stock, valued at $46,894,829.05. This trade represents a 7.58% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold 62,432 shares of company stock worth $9,784,330 in the last quarter.

Institutional Inflows and Outflows

Several large investors have recently modified their holdings of the business. GAMMA Investing LLC raised its holdings in shares of ARM by 126.0% in the third quarter. GAMMA Investing LLC now owns 174 shares of the company's stock worth $25,000 after buying an additional 97 shares during the period. Grey Fox Wealth Advisors LLC purchased a new position in ARM during the 3rd quarter valued at $28,000. Mcguire Capital Advisors Inc. bought a new position in ARM in the 4th quarter valued at $30,000. Navalign LLC bought a new position in ARM in the 4th quarter valued at $33,000. Finally, FWL Investment Management LLC purchased a new stake in ARM in the second quarter worth $34,000. Hedge funds and other 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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