ARM (NASDAQ:ARM) Trading Down 1.4% - Should You Sell?

Key Points

• ARM shares fell 1.4% to $282.57, with trading volume roughly 55% below the average. The stock remains highly volatile, with a beta of 3.90 and a price-to-earnings ratio near 291.
• Analyst sentiment is broadly positive: 18 analysts rate ARM a Buy, seven rate it a Hold and one rates it a Sell. The consensus rating is “Moderate Buy,” with an average price target of $285.33.
• ARM exceeded quarterly expectations, reporting $0.45 in EPS versus $0.40 expected and $1.29 billion in revenue, up 22.4% year over year. However, insiders sold 216,049 shares worth approximately $52.1 million in the last quarter.

ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report) shares were down 1.4% during trading on Friday . The company traded as low as $275.00 and last traded at $282.57. Approximately 3,814,412 shares changed hands during trading, a decline of 55% from the average daily volume of 8,499,154 shares. The stock had previously closed at $286.68.

Analyst Ratings Changes

Several brokerages recently issued reports on ARM. Raymond James Financial reissued an "outperform" rating on shares of ARM in a report on Thursday, May 7th. New Street Research upgraded ARM from a "neutral" rating to a "buy" rating and set a $260.00 price target on the stock in a report on Thursday, July 30th. Rosenblatt Securities lowered their target price on shares of ARM from $270.00 to $250.00 and set a "buy" rating for the company in a report on Friday, July 31st. KeyCorp lifted their price objective on shares of ARM from $300.00 to $430.00 and gave the stock an "overweight" rating in a research note on Tuesday, July 14th. Finally, Susquehanna upped their price objective on shares of ARM from $300.00 to $320.00 and gave the company a "positive" rating in a research report on Tuesday, July 21st. Eighteen equities research analysts have rated the stock with a Buy rating, seven have issued a Hold rating and one has given a Sell rating to the company's stock. According to MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus price target of $285.33.

ARM Stock Performance

The company has a 50-day simple moving average of $324.94 and a two-hundred day simple moving average of $218.25. The stock has a market cap of $301.81 billion, a price-to-earnings ratio of 291.31, a price-to-earnings-growth ratio of 8.14 and a beta of 3.90.

ARM (NASDAQ:ARM - Get Free Report) last announced its quarterly earnings results on Wednesday, July 29th. The company reported $0.45 EPS for the quarter, beating analysts' consensus estimates of $0.40 by $0.05. ARM had a net margin of 20.25% and a return on equity of 12.24%. The firm had revenue of $1.29 billion during the quarter, compared to analysts' expectations of $1.26 billion. During the same quarter last year, the company posted $0.35 earnings per share. The company's revenue for the quarter was up 22.4% compared to the same quarter last year. ARM has set its Q2 2027 guidance at 0.430-0.510 EPS. As a group, sell-side analysts predict that ARM Holdings PLC Sponsored ADR will post 1.15 earnings per share for the current fiscal year.

Insider Activity at ARM

In other ARM news, insider William Abbey sold 6,566 shares of the company's stock in a transaction on Monday, June 1st. The stock was sold at an average price of $402.72, for a total value of $2,644,259.52. Following the transaction, the insider directly owned 20,563 shares of the company's stock, valued at $8,281,131.36. This represents a 24.20% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through this hyperlink. Also, insider Charlotte Claire Eaton sold 7,805 shares of the company's stock in a transaction dated Thursday, May 21st. The shares were sold at an average price of $290.01, for a total transaction of $2,263,528.05. Following the completion of the transaction, the insider owned 5,000 shares in the company, valued at $1,450,050. This trade represents a 60.95% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last quarter, insiders have sold 216,049 shares of company stock worth $52,101,605.

Hedge Funds Weigh In On ARM

Several hedge funds and other institutional investors have recently added to or reduced their stakes in ARM. Amundi raised its position in shares of ARM by 24.8% in the 1st quarter. Amundi now owns 11,804 shares of the company's stock valued at $1,153,000 after buying an additional 2,345 shares in the last quarter. Empowered Funds LLC increased its stake in shares of ARM by 28.8% in the first quarter. Empowered Funds LLC now owns 4,887 shares of the company's stock valued at $522,000 after buying an additional 1,094 shares during the period. Schnieders Capital Management LLC. raised its holdings in ARM by 9.0% during the 2nd quarter. Schnieders Capital Management LLC. now owns 2,430 shares of the company's stock worth $393,000 after purchasing an additional 200 shares during the last quarter. Bank of Nova Scotia acquired a new position in ARM in the second quarter valued at $556,000. Finally, State Street Corp lifted its stake in shares of ARM by 14.7% in the 2nd quarter. State Street Corp now owns 441,445 shares of the company's stock valued at $71,399,000 after purchasing an additional 56,656 shares during the period. 7.53% of the stock is 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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