ARM (NASDAQ:ARM) Stock Price Up 5% - Should You Buy?

Key Points

• ARM shares jumped 5% to about $175 on Monday with trading volume ~8.45M (25% above average); analysts hold a consensus "Moderate Buy" rating with a consensus target of $174.83.
• ARM slightly beat quarterly estimates (EPS $0.43 vs $0.41; revenue $1.24B vs $1.23B) and revenue was up 26.3% year-over-year, but the stock carries a high valuation (P/E ~233.47).
• Insiders have been selling recently: the CEO and CFO sold shares on March 25, and insiders disposed of 62,432 shares worth about $9.78M over the past 90 days.

ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report) shares rose 5% on Monday . The company traded as high as $175.32 and last traded at $175.10. Approximately 8,449,018 shares were traded during trading, an increase of 25% from the average daily volume of 6,785,253 shares. The stock had previously closed at $166.73.

Analyst Ratings Changes

Several research analysts have recently commented on the stock. Benchmark restated a "hold" rating on shares of ARM in a research note on Thursday, February 5th. Deutsche Bank Aktiengesellschaft increased their price target on shares of ARM from $125.00 to $140.00 and gave the stock a "hold" rating in a research note on Wednesday, March 25th. Susquehanna increased their price target on shares of ARM from $170.00 to $210.00 and gave the stock a "positive" rating in a research note on Thursday. Evercore lowered their price objective on ARM from $215.00 to $170.00 and set an "outperform" rating on the stock in a report on Thursday, February 5th. Finally, The Goldman Sachs Group increased their price objective on ARM from $110.00 to $125.00 and gave the company a "sell" rating in a report on Thursday, April 9th. Eighteen analysts have rated the stock with a Buy rating, six have given a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat.com, ARM presently has a consensus rating of "Moderate Buy" and a consensus target price of $174.83.

ARM Stock Performance

The firm has a 50 day moving average of $134.93 and a two-hundred day moving average of $134.81. The stock has a market cap of $184.99 billion, a P/E ratio of 233.47, a P/E/G ratio of 7.52 and a beta of 3.33.

ARM (NASDAQ:ARM - Get Free Report) last announced 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 during 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 revenue for the quarter was up 26.3% compared to the same quarter last year. During the same quarter in the prior year, the company earned $0.39 EPS. On average, sell-side analysts anticipate that ARM Holdings PLC Sponsored ADR will post 0.85 EPS for the current fiscal year.

Insider Activity

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 transaction of $3,157,313.60. Following the sale, the chief financial officer owned 174,706 shares in the company, valued at $25,921,129.22. The trade was a 10.86% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at 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 transaction, the chief executive officer owned 290,965 shares of the company's stock, valued at approximately $46,894,829.05. This represents a 7.58% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold 62,432 shares of company stock worth $9,784,330 over the last 90 days.

Institutional Inflows and Outflows

Several hedge funds have recently bought and sold shares of the stock. Blue Trust Inc. raised its stake in ARM by 73.4% during the first quarter. Blue Trust Inc. now owns 3,257 shares of the company's stock worth $493,000 after acquiring an additional 1,379 shares in the last quarter. TrueMark Investments LLC grew its stake in ARM by 1.4% during the first quarter. TrueMark Investments LLC now owns 7,592 shares of the company's stock worth $1,149,000 after buying an additional 107 shares during the last quarter. Banque Cantonale Vaudoise grew its stake in ARM by 24.9% during the first quarter. Banque Cantonale Vaudoise now owns 9,254 shares of the company's stock worth $1,400,000 after buying an additional 1,847 shares during the last quarter. Cidel Asset Management Inc. acquired a new position in shares of ARM in the 1st quarter worth approximately $305,000. Finally, AdvisorNet Financial Inc boosted its holdings in shares of ARM by 6.2% in the 1st quarter. AdvisorNet Financial Inc now owns 1,681 shares of the company's stock worth $254,000 after acquiring an additional 98 shares in the last quarter. 7.53% of the stock is currently owned by institutional investors and hedge funds.

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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