ARM (NASDAQ:ARM) Trading Down 8.5% - What's Next?

Key Points

• ARM shares fell 8.5% in Monday trading, dropping from a prior close of $323.39 to about $295.97. Trading volume was well below average, with roughly 1.27 million shares changing hands versus the typical 8.78 million.
• Analysts remain mixed but broadly constructive on the stock, with a consensus rating of “Moderate Buy” and an average target price of $279.83. Recent calls ranged from hold to overweight/outperform, with some firms raising price targets significantly.
• ARM continues to trade at premium valuation levels, with a market cap of $322.65 billion and a P/E ratio of 360.96. The company reported quarterly EPS of $0.60 and revenue of $1.49 billion, while insiders have sold 248,205 shares over the last 90 days.

Shares of ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report) fell 8.5% during mid-day trading on Monday . The company traded as low as $294.06 and last traded at $295.97. Approximately 1,272,694 shares changed hands during mid-day trading, a decline of 85% from the average session volume of 8,775,856 shares. The stock had previously closed at $323.39.

Wall Street Analyst Weigh In

Several analysts recently commented on the company. Weiss Ratings restated a "hold (c)" rating on shares of ARM in a research report on Monday, April 20th. Barclays boosted their price target on ARM from $250.00 to $360.00 and gave the stock an "overweight" rating in a research report on Monday, June 1st. Deutsche Bank Aktiengesellschaft reissued a "hold" rating on shares of ARM in a research note on Thursday, May 7th. The Goldman Sachs Group lifted their price objective on shares of ARM from $125.00 to $150.00 and gave the company a "sell" rating in a research note on Thursday, May 7th. Finally, Mizuho lifted their price objective on shares of ARM from $425.00 to $500.00 and gave the company an "outperform" rating in a research note on Monday, June 8th. Nineteen analysts have rated the stock with a Buy rating, seven have issued a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and an average target price of $279.83.

ARM Stock Performance

The stock has a market capitalization of $322.65 billion, a P/E ratio of 360.96, a price-to-earnings-growth ratio of 11.74 and a beta of 3.76. The business has a 50 day simple moving average of $318.07 and a 200-day simple moving average of $197.37.

ARM (NASDAQ:ARM - Get Free Report) last announced its quarterly earnings data on Wednesday, April 1st. The company reported $0.60 earnings per share for the quarter. ARM had a return on equity of 12.43% and a net margin of 18.37%.The business had revenue of $1.49 billion during the quarter. Equities research analysts forecast that ARM Holdings PLC Sponsored ADR will post 1.12 EPS for the current fiscal year.

Insider Buying and Selling at ARM

In other news, insider William Abbey sold 6,566 shares of ARM stock in a transaction that occurred on Monday, June 1st. The shares were sold at an average price of $402.72, for a total value of $2,644,259.52. Following the transaction, the insider owned 20,563 shares of the company's stock, valued at $8,281,131.36. The trade was a 24.20% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this link. Also, CFO Jason Child sold 31,920 shares of ARM stock in a transaction that occurred on Wednesday, May 20th. The stock was sold at an average price of $226.54, for a total transaction of $7,231,156.80. Following the completion of the transaction, the chief financial officer directly owned 174,232 shares in the company, valued at $39,470,517.28. This represents a 15.48% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 248,205 shares of company stock valued at $57,741,572 in the last ninety days.

Institutional Trading of ARM

A number of large investors have recently added to or reduced their stakes in ARM. Rathbones Group PLC raised its position in shares of ARM by 4,638.8% during the fourth quarter. Rathbones Group PLC now owns 500,043 shares of the company's stock worth $54,660,000 after purchasing an additional 489,491 shares during the period. Paragon Capital Management Inc. purchased a new stake in shares of ARM during the fourth quarter valued at $826,000. Lansdowne Partners UK LLP acquired a new position in shares of ARM in the 3rd quarter valued at $8,486,000. Hyperion Asset Management Ltd acquired a new position in shares of ARM in the 3rd quarter valued at $202,980,000. Finally, Zurcher Kantonalbank Zurich Cantonalbank increased its stake in ARM by 34.7% in the 4th quarter. Zurcher Kantonalbank Zurich Cantonalbank now owns 24,188 shares of the company's stock worth $2,644,000 after purchasing an additional 6,232 shares in the last quarter. 7.53% of the stock is currently owned by institutional investors.

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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