ARM (NASDAQ:ARM) Trading Up 2.3% - Here's Why

Key Points

• Shares rose 2.3% to $161.22, and analysts maintain a consensus Moderate Buy with an average price target of $172.33 (HSBC recently raised its target to $205).
• ARM posted an earnings beat for the quarter—EPS $0.43 vs. $0.41 and revenue $1.24B, up 26.3% year-over-year—with analysts forecasting about 0.9 EPS for the current year.
• Top insiders sold shares on March 25 (CEO and CFO transactions), and insiders have disposed of 53,133 shares worth roughly $8.29M over the last three months.

ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report)'s share price was up 2.3% during trading on Tuesday . The company traded as high as $163.50 and last traded at $161.22. Approximately 6,257,175 shares traded hands during trading, a decline of 9% from the average daily volume of 6,844,899 shares. The stock had previously closed at $157.58.

Analyst Ratings Changes

A number of equities research analysts recently commented on ARM shares. Citigroup cut ARM from a "buy" rating to a "hold" rating in a research note on Tuesday, January 13th. HSBC raised ARM from a "reduce" rating to a "buy" rating and lifted their price objective for the stock from $90.00 to $205.00 in a research note on Friday, March 20th. Bank of America reaffirmed a "neutral" rating and set a $120.00 price objective on shares of ARM in a research note on Tuesday, January 13th. Susquehanna raised ARM from a "neutral" rating to a "positive" rating and set a $150.00 price objective for the company in a research note on Wednesday, January 21st. Finally, Barclays reaffirmed an "overweight" rating and set a $165.00 price objective on shares of ARM in a research note on Thursday, March 26th. Eighteen research analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, the company presently has an average rating of "Moderate Buy" and an average target price of $172.33.

ARM Price Performance

The stock has a market capitalization of $170.33 billion, a price-to-earnings ratio of 214.96, a PEG ratio of 6.71 and a beta of 3.33. The business has a 50 day simple moving average of $130.82 and a 200-day simple moving average of $134.26.

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

Insider Transactions at ARM

In other news, CFO Jason Child sold 21,280 shares of the business'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 sale, the chief financial officer directly 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 sale was disclosed in a document filed with the SEC, which is available at the SEC website. Also, CEO Rene A. Haas sold 23,867 shares of the business's stock in a transaction dated Wednesday, March 25th. The shares were sold at an average price of $161.17, for a total value of $3,846,644.39. Following the completion of the sale, the chief executive officer owned 290,965 shares in the company, valued at approximately $46,894,829.05. This trade represents a 7.58% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last three months, insiders sold 53,133 shares of company stock valued at $8,288,586.

Institutional Trading of ARM

Institutional investors have recently modified their holdings of the company. Pacific Heights Asset Management LLC lifted its holdings in shares of ARM by 32.1% in the third quarter. Pacific Heights Asset Management LLC now owns 185,000 shares of the company's stock valued at $26,176,000 after purchasing an additional 45,000 shares in the last quarter. Orion Porfolio Solutions LLC bought a new stake in shares of ARM in the second quarter valued at about $6,277,000. Stanley Laman Group Ltd. bought a new stake in shares of ARM in the third quarter valued at about $6,219,000. Voya Investment Management LLC lifted its holdings in shares of ARM by 15.5% in the third quarter. Voya Investment Management LLC now owns 202,443 shares of the company's stock valued at $28,644,000 after purchasing an additional 27,228 shares in the last quarter. Finally, Lansdowne Partners UK LLP bought a new stake in shares of ARM in the third quarter valued at about $8,486,000. 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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