ARM Target of Unusually Large Options Trading (NASDAQ:ARM)

Key Points

• ARM options activity surged: Investors purchased 102,285 call options, 27% above the average volume of 80,446. The stock rose $43.43 to $319.04 during Monday’s trading.
• ARM’s latest quarterly results exceeded expectations, with EPS of $0.45 versus a $0.40 consensus estimate and revenue of $1.29 billion, up 22.4% year over year.
• Analyst sentiment remains broadly positive, with a consensus “Moderate Buy” rating and a $305.72 price target, although ARM trades at a very high P/E ratio of 328.83. CFO Jason Child also sold 10,400 shares under a pre-arranged trading plan.

Arm Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report) saw unusually large options trading activity on Monday. Investors acquired 102,285 call options on the company. This is an increase of 27% compared to the average volume of 80,446 call options.

ARM Price Performance

ARM stock traded up $43.43 during midday trading on Monday, hitting $319.04. The company's stock had a trading volume of 8,649,172 shares, compared to its average volume of 7,772,470. ARM has a twelve month low of $100.02 and a twelve month high of $452.70. The company's fifty day moving average price is $259.66 and its 200 day moving average price is $248.00. The stock has a market capitalization of $340.76 billion, a P/E ratio of 328.83, a PEG ratio of 8.17 and a beta of 3.89.

ARM (NASDAQ:ARM - Get Free Report) last posted its quarterly earnings data on Thursday, July 30th. The company reported $0.45 EPS for the quarter, topping analysts' consensus estimates of $0.40 by $0.05. The company had revenue of $1.29 billion during the quarter, compared to the consensus estimate of $1.26 billion. ARM had a net margin of 20.25% and a return on equity of 12.24%. The company's quarterly revenue was up 22.4% on a year-over-year basis. During the same period in the prior year, the business posted $0.35 EPS. Equities analysts expect that ARM will post 1.15 EPS for the current fiscal year.

Insider Activity

In related news, CFO Jason Child sold 10,400 shares of the company's stock in a transaction on Thursday, August 27th. The shares were sold at an average price of $255.33, for a total value of $2,655,432.00. Following the completion of the sale, the chief financial officer owned 163,832 shares in the company, valued at $41,831,224.56. This represents a 5.97% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Institutional Investors Weigh In On ARM

Institutional investors and hedge funds have recently made changes to their positions in the stock. Syntax Research Inc. acquired a new position in ARM during the first quarter worth $30,000. Evelyn Partners Investment Management Services Ltd acquired a new stake in ARM in the first quarter valued at $30,000. Allied Private Wealth LLC acquired a new stake in ARM in the second quarter valued at $71,000. Cassaday & Co Wealth Management LLC bought a new position in shares of ARM in the 1st quarter valued at about $40,000. Finally, Motiv8 Investments LLC acquired a new position in shares of ARM during the 4th quarter worth about $38,000. Institutional investors own 7.53% of the company's stock.

Analysts Set New Price Targets

Several equities research analysts have recently issued reports on ARM shares. Jefferies Financial Group reissued a "buy" rating and set a $320.00 price objective on shares of ARM in a research report on Monday, July 20th. Benchmark initiated coverage on shares of ARM in a research note on Thursday, July 16th. They issued a "hold" rating for the company. Bank of America reissued a "neutral" rating on shares of ARM in a research note on Thursday, July 30th. UBS Group reduced their price objective on ARM from $360.00 to $320.00 and set a "buy" rating for the company in a research report on Thursday, July 30th. Finally, Raymond James Financial reissued an "outperform" rating on shares of ARM in a research report on Tuesday, August 25th. One investment analyst has rated the stock with a Strong Buy rating, eighteen have issued a Buy rating, seven have issued a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and a consensus price target of $305.72.

About ARM

Arm Holdings plc is a semiconductor and software intellectual property company headquartered in Cambridge, England. Rather than manufacturing chips, Arm develops processor architectures and technology designs that it licenses to semiconductor companies, device manufacturers and other technology businesses for use in their own products.

Arm's portfolio includes central processing unit (CPU) architectures and processor cores, graphics processing units (GPUs), systems IP, interconnect technology, security solutions and related software and development tools.

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