ARM (NASDAQ:ARM) Trading Up 2.2% - Still a Buy?

Key Points

• ARM shares rose 2.2% in mid-day trading, reaching as high as $338.24 before settling at $322.24. Trading volume was 41% below average, suggesting lighter-than-usual investor activity.
• Analyst sentiment remains broadly positive: 19 analysts rate ARM a Buy, seven a Hold, and one a Sell. However, the consensus price target of $279.83 sits below the current trading price, even as UBS and TD Cowen recently raised their targets to $470 and issued Buy ratings.
• ARM continues to post strong fundamentals and high market expectations, with Q1 revenue of $1.49 billion, EPS of $0.60, and a market cap of $344.18 billion. The stock also trades at a very high P/E ratio of 383.62, while insiders have sold $57.7 million worth of shares over the last 90 days.

ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report)'s stock price rose 2.2% during mid-day trading on Monday . The company traded as high as $338.24 and last traded at $322.24. 5,266,892 shares changed hands during mid-day trading, a decline of 41% from the average daily volume of 8,934,582 shares. The stock had previously closed at $315.28.

Wall Street Analyst Weigh In

A number of equities research analysts have recently commented on ARM shares. Royal Bank Of Canada lifted their price target on shares of ARM from $175.00 to $260.00 and gave the stock an "outperform" rating in a report on Thursday, May 7th. The Goldman Sachs Group upped 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. Weiss Ratings reaffirmed a "hold (c)" rating on shares of ARM in a research note on Monday, April 20th. UBS Group boosted their price target on ARM from $260.00 to $470.00 and gave the company a "buy" rating in a report on Wednesday, June 24th. Finally, TD Cowen boosted their price target on ARM from $265.00 to $475.00 and gave the company a "buy" rating in a report on Wednesday, June 24th. Nineteen equities research analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has issued a Sell rating to the company. According to MarketBeat, the company has a consensus rating of "Moderate Buy" and a consensus price target of $279.83.

ARM Trading Up 2.2%

The stock's 50 day moving average price is $307.70 and its 200 day moving average price is $190.34. The company has a market cap of $344.18 billion, a price-to-earnings ratio of 383.62, a P/E/G ratio of 11.45 and a beta of 3.76.

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

Insider Buying and Selling

In related news, insider William Abbey sold 10,887 shares of the stock in a transaction on Tuesday, May 19th. The stock was sold at an average price of $224.14, for a total value of $2,440,212.18. Following the transaction, the insider directly owned 43,353 shares of the company's stock, valued at approximately $9,717,141.42. This trade represents a 20.07% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. Also, insider Richard Roy Grisenthwaite sold 24,339 shares of ARM stock in a transaction on Monday, May 18th. The shares were sold at an average price of $209.15, for a total value of $5,090,501.85. Following the completion of the transaction, the insider owned 5,543 shares in the company, valued at $1,159,318.45. The trade was a 81.45% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold 248,205 shares of company stock worth $57,741,572 over the last 90 days.

Hedge Funds Weigh In On ARM

Large investors have recently modified their holdings of the company. Rathbones Group PLC grew its holdings in shares of ARM by 0.7% during the 3rd quarter. Rathbones Group PLC now owns 10,552 shares of the company's stock worth $1,493,000 after purchasing an additional 70 shares during the period. CreativeOne Wealth LLC raised its holdings in ARM by 5.0% in the fourth quarter. CreativeOne Wealth LLC now owns 1,830 shares of the company's stock valued at $200,000 after buying an additional 87 shares during the period. AdvisorNet Financial Inc raised its holdings in ARM by 6.2% in the first quarter. AdvisorNet Financial Inc now owns 1,681 shares of the company's stock valued at $254,000 after buying an additional 98 shares during the period. Moors & Cabot Inc. lifted its position in ARM by 5.3% during the third quarter. Moors & Cabot Inc. now owns 2,050 shares of the company's stock valued at $290,000 after buying an additional 103 shares in the last quarter. Finally, Heritage Trust Co lifted its position in ARM by 5.5% during the fourth quarter. Heritage Trust Co now owns 2,045 shares of the company's stock valued at $224,000 after buying an additional 107 shares in the last quarter. 7.53% of the stock is currently owned by hedge funds and other 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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