ARM (NASDAQ:ARM) Stock Price Up 1.5% - Should You Buy?

Key Points

• ARM shares rose about 1.5% to $201.69 midday (high $203.50) on lower-than-average volume; the company has a market cap near $213.1B and a high valuation with a P/E around 269.
• Analysts' consensus is a Moderate Buy with an average target of $176.71 (18 Buy, 6 Hold, 1 Sell), though recent price targets and ratings have varied and some firms have raised targets.
• ARM beat its latest quarter (EPS $0.43 vs. $0.41, revenue $1.24B, +26.3% YoY), but insiders — including the CEO and CFO — sold shares in late March, trimming their stakes.

ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report)'s share price rose 1.5% during mid-day trading on Wednesday . The stock traded as high as $203.50 and last traded at $201.69. Approximately 5,969,055 shares traded hands during trading, a decline of 18% from the average daily volume of 7,323,387 shares. The stock had previously closed at $198.65.

Analyst Upgrades and Downgrades

ARM has been the subject of several recent analyst reports. Needham & Company LLC raised shares of ARM from a "hold" rating to a "buy" rating and set a $200.00 price objective for the company in a research report on Thursday, March 26th. Morgan Stanley reaffirmed an "equal weight" rating and set a $150.00 price objective (up from $135.00) on shares of ARM in a research report on Tuesday, April 7th. Jefferies Financial Group set a $170.00 price objective on shares of ARM in a research report on Thursday, February 5th. Royal Bank Of Canada lifted their price objective on shares of ARM from $130.00 to $175.00 and gave the stock an "outperform" rating in a research report on Wednesday, March 25th. Finally, Citigroup cut shares of ARM from a "buy" rating to a "hold" rating in a research report on Tuesday, January 13th. 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 company. According to MarketBeat, the company presently has a consensus rating of "Moderate Buy" and an average target price of $176.71.

ARM Trading Up 1.5%

The company's 50 day moving average is $145.44 and its 200 day moving average is $136.84. The stock has a market capitalization of $213.09 billion, a price-to-earnings ratio of 268.92, a price-to-earnings-growth ratio of 9.73 and a beta of 3.33.

ARM (NASDAQ:ARM - Get Free Report) last posted its quarterly earnings data on Thursday, February 5th. The company reported $0.43 EPS 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 analyst estimates of $1.23 billion. ARM had a net margin of 17.15% and a return on equity of 14.01%. ARM's quarterly revenue was up 26.3% on a year-over-year basis. During the same period in the previous year, the business posted $0.39 earnings per share. Analysts anticipate that ARM Holdings PLC Sponsored ADR will post 0.85 EPS for the current fiscal year.

Insiders Place Their Bets

In other ARM news, CFO Jason Child sold 21,280 shares of ARM 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 transaction, the chief financial officer directly owned 174,706 shares in the company, valued at approximately $25,921,129.22. The trade was a 10.86% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, CEO Rene A. Haas sold 23,867 shares of ARM stock in a transaction on 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 in the company, valued at approximately $46,894,829.05. This represents a 7.58% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders sold 83,712 shares of company stock worth $13,614,730.

Institutional Inflows and Outflows

A number of institutional investors have recently bought and sold shares of ARM. Pacific Heights Asset Management LLC boosted its holdings in shares of ARM by 32.1% in the third quarter. Pacific Heights Asset Management LLC now owns 185,000 shares of the company's stock valued at $26,176,000 after acquiring an additional 45,000 shares in the last quarter. Paragon Capital Management Inc. purchased a new stake in shares of ARM in the fourth quarter valued at about $826,000. Stanley Laman Group Ltd. purchased a new stake in shares of ARM in the third quarter valued at about $6,219,000. Lansdowne Partners UK LLP purchased a new stake in shares of ARM in the third quarter valued at about $8,486,000. Finally, Hyperion Asset Management Ltd purchased a new stake in shares of ARM in the third quarter valued at about $202,980,000. 7.53% of the stock is currently owned by institutional investors and hedge funds.

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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