ARM (NASDAQ:ARM) Shares Gap Up - Should You Buy?

Key Points

• ARM shares surged: The stock opened at $306.78 after closing at $292.34 and was last trading at $311.89. Its market capitalization is approximately $335.7 billion, but its valuation is elevated at a P/E ratio of 324.
• Analyst sentiment is cautiously positive: ARM has a consensus “Moderate Buy” rating and an average price target of $303.32, though recent targets range from $280 to $350, with several firms maintaining “Hold” ratings.
• Strong operating results support the stock: Quarterly revenue rose 22.4% year over year to $1.29 billion, while EPS of $0.45 exceeded expectations of $0.40. However, CFO Jason Child sold 10,400 shares under a pre-arranged trading plan.

Arm Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report) gapped up prior to trading on Friday. The stock had previously closed at $292.34, but opened at $306.78. ARM shares last traded at $311.89, with a volume of 1,061,349 shares changing hands.

Analysts Set New Price Targets

Several brokerages recently commented on ARM. Benchmark assumed coverage on shares of ARM in a report on Thursday, July 16th. They set a "hold" rating for the company. Weiss Ratings restated a "hold (c)" rating on shares of ARM in a research note on Friday, July 17th. TD Cowen decreased their price objective on ARM from $475.00 to $350.00 and set a "buy" rating for the company in a report on Thursday, July 30th. Jefferies Financial Group reaffirmed a "buy" rating and issued a $320.00 target price on shares of ARM in a research report on Monday, July 20th. Finally, Wells Fargo & Company dropped their target price on ARM from $350.00 to $280.00 and set an "overweight" rating on the stock in a report on Thursday, July 30th. One analyst has rated the stock with a Strong Buy rating, eighteen have issued a Buy rating, seven have given a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and a consensus price target of $303.32.

ARM Stock Performance

The business's 50-day moving average price is $264.70 and its 200 day moving average price is $259.93. The company has a market cap of $335.67 billion, a P/E ratio of 324.00, a P/E/G ratio of 8.59 and a beta of 3.78.

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

Insiders Place Their Bets

In other ARM news, CFO Jason Child sold 10,400 shares of the company's stock in a transaction that occurred on Monday, September 21st. The stock was sold at an average price of $300.00, for a total value of $3,120,000.00. Following the sale, 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 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 Inflows and Outflows

A number of institutional investors have recently made changes to their positions in the business. Hyperion Asset Management Ltd increased its holdings in shares of ARM by 28.0% in the fourth quarter. Hyperion Asset Management Ltd now owns 1,836,185 shares of the company's stock valued at $200,713,000 after purchasing an additional 401,594 shares during the last quarter. Capital Research Global Investors raised its holdings in ARM by 5.1% in the 4th quarter. Capital Research Global Investors now owns 1,805,110 shares of the company's stock valued at $197,332,000 after acquiring an additional 86,978 shares during the period. Franklin Resources Inc. lifted its position in ARM by 0.7% during the fourth quarter. Franklin Resources Inc. now owns 1,461,410 shares of the company's stock worth $159,747,000 after acquiring an additional 10,385 shares during the last quarter. Employees Provident Fund Board acquired a new stake in ARM during the fourth quarter worth approximately $120,241,000. Finally, SG Americas Securities LLC boosted its holdings in shares of ARM by 265.6% during the first quarter. SG Americas Securities LLC now owns 971,067 shares of the company's stock worth $146,903,000 after acquiring an additional 705,459 shares during the period. 7.53% of the stock is 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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.