ARM (NASDAQ:ARM) Shares Down 8.7% - Time to Sell?

Key Points

• ARM shares fell 8.7% to $283.33, with trading volume 16% above its average. Despite the decline, the stock remains above its 50-day and 200-day moving averages.
• Analysts maintain a broadly positive view, with 18 Buy and one Strong Buy rating against seven Holds and one Sell. The consensus rating is “Moderate Buy,” with an average price target of $305.72.
• ARM reported quarterly revenue of $1.29 billion and EPS of $0.45, beating estimates while revenue rose 22.4% year over year. However, its valuation remains elevated at roughly 292 times earnings, and CFO Jason Child sold $3.12 million in shares under a pre-arranged trading plan.

Arm Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report) dropped 8.7% during trading on Monday. The company traded as low as $279.20 and last traded at $283.33. Approximately 9,023,777 shares changed hands during trading, an increase of 16% from the average session volume of 7,803,205 shares. The stock had previously closed at $310.32.

Analyst Ratings Changes

Several brokerages have recently weighed in on ARM. TD Cowen lowered their price target on shares of ARM from $475.00 to $350.00 and set a "buy" rating for the company in a research report on Thursday, July 30th. New Street Research raised shares of ARM from a "neutral" rating to a "buy" rating and set a $260.00 price objective on the stock in a report on Thursday, July 30th. Piper Sandler started coverage on shares of ARM in a research note on Wednesday, September 9th. They issued an "overweight" rating and a $320.00 price objective for the company. HSBC lowered ARM from a "buy" rating to a "hold" rating and upped their target price for the stock from $255.00 to $315.00 in a report on Tuesday, July 14th. Finally, UBS Group cut their price target on ARM from $360.00 to $320.00 and set a "buy" rating on the stock in a report on Thursday, July 30th. One research analyst has rated the stock with a Strong Buy rating, eighteen have given a Buy rating, seven have assigned a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, ARM has an average rating of "Moderate Buy" and an average target price of $305.72.

ARM Stock Down 8.7%

The business has a 50-day moving average price of $264.04 and a 200-day moving average price of $255.09. The firm has a market capitalization of $302.62 billion, a price-to-earnings ratio of 292.10, a P/E/G ratio of 9.20 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 earnings per share for the quarter, topping analysts' consensus estimates of $0.40 by $0.05. ARM had a return on equity of 12.24% and a net margin of 20.25%.The firm had revenue of $1.29 billion during the quarter, compared to analysts' expectations of $1.26 billion. During the same quarter last year, the firm earned $0.35 EPS. The business's quarterly revenue was up 22.4% on a year-over-year basis. On average, equities research analysts forecast that Arm Holdings PLC Sponsored ADR will post 1.15 earnings per share for the current year.

Insider Activity

In other news, CFO Jason Child sold 10,400 shares of the company's stock in a transaction dated 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 transaction, the chief financial officer owned 153,442 shares in the company, valued at $46,032,600. This represents a 6.35% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Institutional Trading of ARM

A number of institutional investors have recently bought and sold shares of ARM. Syntax Research Inc. acquired a new position in ARM during the 1st quarter valued at approximately $30,000. Evelyn Partners Investment Management Services Ltd acquired a new stake in shares of ARM during the first quarter worth $30,000. Motiv8 Investments LLC acquired a new stake in shares of ARM during the fourth quarter worth $38,000. Cassaday & Co Wealth Management LLC purchased a new stake in shares of ARM during the first quarter valued at $40,000. Finally, Sterling Capital Management LLC grew its holdings in shares of ARM by 1,400.0% during the first quarter. Sterling Capital Management LLC now owns 375 shares of the company's stock valued at $57,000 after buying an additional 350 shares during the last quarter. 7.53% of the stock is currently owned by institutional investors and hedge funds.

About ARM

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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