ARM (NASDAQ:ARM) Shares Climb 6.2% - Should You Buy?

Key Points

• ARM shares rose 6.2% to $223.35, despite trading below their 50-day and 200-day moving averages of $261.86 and $272.67, respectively.
• Analysts maintain a generally favorable outlook, with a consensus “Moderate Buy” rating and an average price target of $303.32, though targets range widely from $320 to $350 and beyond.
• ARM’s latest quarterly results exceeded expectations: EPS was $0.45 versus $0.40 expected, revenue reached $1.29 billion, and year-over-year revenue increased 22.4%. However, its valuation remains elevated, with a P/E ratio above 230.

Arm Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report) shares shot up 6.2% on Monday. The company traded as high as $225.67 and last traded at $223.35. 4,645,221 shares were traded during mid-day trading, a decline of 38% from the average session volume of 7,498,200 shares. The stock had previously closed at $210.33.

Analyst Ratings Changes

A number of brokerages have recently weighed in on ARM. Weiss Ratings restated a "hold (c)" rating on shares of ARM in a research report on Thursday, October 15th. Bank of America reiterated a "neutral" rating and issued a $335.00 price objective (up from $245.00) on shares of ARM in a research report on Thursday, July 30th. Susquehanna increased their price objective on shares of ARM from $300.00 to $320.00 and gave the company a "positive" rating in a research note on Tuesday, July 21st. Benchmark began coverage on shares of ARM in a research report on Thursday, July 16th. They set a "hold" rating for the company. Finally, TD Cowen reduced their price target on shares of ARM from $475.00 to $350.00 and set a "buy" rating on the stock in a report on Thursday, July 30th. One investment analyst has rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating, seven have given a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and an average price target of $303.32.

ARM Price Performance

The company has a 50-day moving average of $261.86 and a two-hundred day moving average of $272.67. The stock has a market capitalization of $238.56 billion, a PE ratio of 230.26, a P/E/G ratio of 6.24 and a beta of 3.78.

ARM (NASDAQ:ARM - Get Free Report) last released its earnings results on Thursday, July 30th. The company reported $0.45 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.40 by $0.05. ARM had a net margin of 20.25% and a return on equity of 12.24%. The business had revenue of $1.29 billion for the quarter, compared to analysts' expectations of $1.26 billion. During the same period last year, the company earned $0.35 earnings per share. The company's quarterly revenue was up 22.4% on a year-over-year basis. On average, research analysts forecast that Arm Holdings PLC Sponsored ADR will post 1.15 EPS for the current fiscal year.

Insiders Place Their Bets

In other ARM news, CFO Jason Child sold 10,400 shares of ARM stock in a transaction on Monday, September 21st. The shares were sold at an average price of $300.00, for a total value of $3,120,000.00. Following the transaction, the chief financial officer owned 153,442 shares in the company, valued at $46,032,600. This trade represents a 6.35% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Institutional Investors Weigh In On ARM

Several institutional investors and hedge funds have recently added to or reduced their stakes in ARM. Arrowstreet Capital Limited Partnership raised its holdings in ARM by 1,203.5% in the first quarter. Arrowstreet Capital Limited Partnership now owns 945,152 shares of the company's stock valued at $142,983,000 after buying an additional 872,644 shares during the period. Janus Henderson Group PLC purchased a new stake in ARM during the first quarter worth approximately $116,112,000. Hyperion Asset Management Ltd grew its stake in ARM by 36.9% during the third quarter. Hyperion Asset Management Ltd now owns 727,273 shares of the company's stock worth $210,662,000 after buying an additional 195,942 shares during the period. Altshuler Shaham Ltd raised its stake in shares of ARM by 202.6% in the 1st quarter. Altshuler Shaham Ltd now owns 478,289 shares of the company's stock valued at $72,356,000 after acquiring an additional 320,236 shares during the period. Finally, Sei Investments Co. lifted its holdings in shares of ARM by 67.5% during the 1st quarter. Sei Investments Co. now owns 454,220 shares of the company's stock valued at $68,714,000 after acquiring an additional 183,045 shares in the last quarter. 7.53% of the stock is currently owned by institutional investors and hedge funds.

ARM Company Profile

Arm Holdings plc NASDAQ: ARM is a semiconductor and software design company that develops central processing unit (CPU) architectures and related intellectual property. Rather than manufacturing chips itself, Arm licenses its designs and instruction-set architectures to semiconductor companies and technology manufacturers, which incorporate them into their own products.

The company's offerings include CPU processor cores, graphics processing units through its Mali product family, system IP, development tools and software.

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