ARM (NASDAQ:ARM) Trading 1.9% Higher - Here's What Happened

Key Points

• ARM shares rose 1.9% to $162.33 on Thursday (intraday high $166.09) with 5.74M shares traded, about 15% below average session volume.
• Analysts hold a consensus of "Moderate Buy" with an average price target of $174.83 (18 Buys, 6 Holds, 1 Sell), and several firms recently raised targets into the $140–$175 range.
• ARM beat quarterly estimates with $0.43 EPS and $1.24B revenue (up 26.3% YoY) but trades at a rich valuation (market cap ~$171.5B, P/E ~216); insiders have sold roughly $9.78M of stock in the past 90 days, including filings by the CFO and CEO.

ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report)'s stock price traded up 1.9% during trading on Thursday . The company traded as high as $166.09 and last traded at $162.33. 5,735,897 shares were traded during mid-day trading, a decline of 15% from the average session volume of 6,785,580 shares. The stock had previously closed at $159.34.

Wall Street Analyst Weigh In

A number of equities research analysts have recently commented on the company. Deutsche Bank Aktiengesellschaft lifted their price objective on ARM from $125.00 to $140.00 and gave the company a "hold" rating in a research report on Wednesday, March 25th. Oddo Bhf set a $170.00 price target on ARM in a research report on Monday, January 5th. Rosenblatt Securities reissued a "buy" rating and set a $175.00 price target on shares of ARM in a research report on Wednesday, March 25th. Royal Bank Of Canada boosted their price target on ARM from $130.00 to $175.00 and gave the company an "outperform" rating in a research report on Wednesday, March 25th. Finally, Citigroup downgraded ARM from a "buy" rating to a "hold" rating in a research report on Tuesday, January 13th. Eighteen research analysts have rated the stock with a Buy rating, six have given a Hold rating and one has assigned a Sell rating to the company's stock. According to MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and an average target price of $174.83.

ARM Price Performance

The stock has a 50-day simple moving average of $133.04 and a 200-day simple moving average of $134.58. The stock has a market cap of $171.50 billion, a PE ratio of 216.44, a P/E/G ratio of 7.27 and a beta of 3.33.

ARM (NASDAQ:ARM - Get Free Report) last issued its earnings results on Thursday, February 5th. The company reported $0.43 earnings per share for the quarter, topping the consensus estimate of $0.41 by $0.02. ARM had a return on equity of 14.01% and a net margin of 17.15%.The company had revenue of $1.24 billion during the quarter, compared to the consensus estimate of $1.23 billion. During the same quarter in the prior year, the business earned $0.39 earnings per share. The company's revenue was up 26.3% compared to the same quarter last year. As a group, equities research analysts anticipate that ARM Holdings PLC Sponsored ADR will post 0.9 EPS for the current year.

Insider Activity

In other news, CFO Jason Child sold 21,280 shares of the company's stock in a transaction dated Wednesday, March 25th. The stock was sold at an average price of $148.37, for a total value of $3,157,313.60. Following the completion of the sale, the chief financial officer owned 174,706 shares of the company's stock, valued at $25,921,129.22. This represents a 10.86% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, CEO Rene A. Haas sold 9,299 shares of the company's stock in a transaction dated Tuesday, April 14th. The stock was sold at an average price of $160.85, for a total value of $1,495,744.15. Following the completion of the sale, the chief executive officer directly owned 273,680 shares of the company's stock, valued at $44,021,428. The trade was a 3.29% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 62,432 shares of company stock valued at $9,784,330 in the last ninety days.

Institutional Investors Weigh In On ARM

Several institutional investors and hedge funds have recently modified their holdings of ARM. Capital Research Global Investors purchased a new stake in shares of ARM in the third quarter worth about $243,098,000. Northwestern Mutual Wealth Management Co. lifted its stake in shares of ARM by 2,623.5% in the fourth quarter. Northwestern Mutual Wealth Management Co. now owns 1,671,787 shares of the company's stock worth $182,743,000 after acquiring an additional 1,610,403 shares in the last quarter. Hyperion Asset Management Ltd acquired a new position in shares of ARM in the third quarter worth about $202,980,000. Employees Provident Fund Board acquired a new position in shares of ARM in the fourth quarter worth about $120,241,000. Finally, Invesco Ltd. lifted its stake in shares of ARM by 36.9% in the fourth quarter. Invesco Ltd. now owns 2,426,850 shares of the company's stock worth $265,279,000 after acquiring an additional 654,727 shares in the last quarter. Hedge funds and other institutional investors own 7.53% of the company's stock.

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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