ARM (NASDAQ:ARM) Shares Down 2.7% - Here's What Happened

Key Points

• ARM shares fell 2.7% to $294.37 on Wednesday, with trading volume down 56% from the average session. The stock’s market capitalization was approximately $314.4 billion, while its P/E ratio remained elevated at 303.48.
• Analyst sentiment remains positive overall, with a consensus rating of “Moderate Buy” and an average price target of $303.32. Recent actions included HSBC downgrading ARM to Hold, while New Street Research upgraded it to Buy.
• ARM exceeded quarterly expectations, reporting $0.45 in EPS versus the $0.40 consensus and $1.29 billion in revenue, up 22.4% year over year. CFO Jason Child separately sold 10,400 shares for $3.12 million under a pre-arranged trading plan.

Arm Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report)'s share price traded down 2.7% on Wednesday. The stock traded as low as $290.50 and last traded at $294.37. Approximately 3,401,833 shares were traded during trading, a decline of 56% from the average session volume of 7,669,170 shares. The stock had previously closed at $302.56.

Wall Street Analyst Weigh In

A number of equities research analysts recently weighed in on the stock. HSBC cut shares of ARM from a "buy" rating to a "hold" rating and lifted their price objective for the company from $255.00 to $315.00 in a research note on Tuesday, July 14th. New Street Research raised shares of ARM from a "neutral" rating to a "buy" rating and set a $260.00 target price on the stock in a research note on Thursday, July 30th. Needham & Company LLC restated a "buy" rating and set a $255.00 price target on shares of ARM in a research report on Thursday, July 30th. Bank of America reaffirmed a "neutral" rating and issued a $335.00 price target (up from $245.00) on shares of ARM in a research note on Thursday, July 30th. Finally, Jefferies Financial Group reiterated a "buy" rating and issued a $320.00 price objective on shares of ARM in a report on Monday, July 20th. One analyst has rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating, seven have assigned a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat, ARM currently has a consensus rating of "Moderate Buy" and an average target price of $303.32.

ARM Stock Down 2.7%

The company has a 50 day moving average of $267.54 and a two-hundred day moving average of $263.70. The firm has a market cap of $314.41 billion, a P/E ratio of 303.48, a PEG ratio of 8.98 and a beta of 3.78.

ARM (NASDAQ:ARM - Get Free Report) last issued its quarterly earnings results on Thursday, July 30th. The company reported $0.45 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 firm had revenue of $1.29 billion for the quarter, compared to analysts' expectations of $1.26 billion. During the same period in the previous year, the business earned $0.35 earnings per share. ARM's revenue for the quarter was up 22.4% compared to the same quarter last year. Research analysts expect that Arm Holdings PLC Sponsored ADR will post 1.15 earnings per share for the current fiscal year.

Insider Buying and Selling

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

Institutional Inflows and Outflows

Several institutional investors have recently modified their holdings of ARM. CX Institutional bought a new stake in shares of ARM during the 3rd quarter worth $58,000. QRG Capital Management Inc. raised its position in shares of ARM by 32.1% during the second quarter. QRG Capital Management Inc. now owns 9,591 shares of the company's stock worth $3,401,000 after purchasing an additional 2,330 shares during the period. Envestnet Portfolio Solutions Inc. purchased a new stake in shares of ARM during the second quarter valued at $2,755,000. IKE Capital LLC lifted its holdings in shares of ARM by 88.7% during the second quarter. IKE Capital LLC now owns 5,331 shares of the company's stock valued at $1,890,000 after purchasing an additional 2,506 shares during the last quarter. Finally, Capstone Financial Advisors Inc. purchased a new stake in shares of ARM during the second quarter valued at $308,000. Institutional investors own 7.53% of the company's stock.

ARM Company Profile

Arm Holdings plc NASDAQ: ARM is a semiconductor and software design company that develops intellectual property used to create energy-efficient computing products. Arm does not generally manufacture chips; instead, it licenses processor architectures, CPU cores, graphics technologies and related system IP to semiconductor companies and original equipment manufacturers, which incorporate them into their own products.

The company's offerings include the Cortex family of CPUs for mobile, consumer, automotive and embedded applications; Neoverse platforms for cloud and data-center infrastructure; Mali graphics processing units; and Ethos neural processing units designed for artificial intelligence and machine-learning workloads.

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