ARM (NASDAQ:ARM) Shares Up 12.1% - Should You Buy?

Key Points

• ARM shares jumped 12.1% to $203.36 Wednesday as chip stocks rallied; trading volume was about 10% below the average session volume.
• Recent quarterly results beat expectations: EPS was $0.52 versus a $0.48 consensus, while revenue rose 27.1% year over year to $1.44 billion.
• Analysts rate the stock a “Moderate Buy,” with an average price target of $291.72, though ratings are mixed and ARM trades at a high P/E of 233.75.

Arm Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report) traded up 12.1% on Wednesday. The stock traded as high as $207.44 and last traded at $203.36. 6,709,294 shares were traded during mid-day trading, a decline of 10% from the average session volume of 7,455,411 shares. The stock had previously closed at $181.49.

Top ARM Stories

Investors following ARM have been watching these stories:

• Positive Sentiment: Chip shares broadly rallied Wednesday, providing a near-term tailwind for ARM as investors bought after recent declines. Chip Stocks Rally After Slide. These Names Are Leading The Charge Higher.
• Negative Sentiment: Higher memory costs are reportedly pressuring smartphone demand and slowing phone-royalty growth, although Arm’s data-center royalties doubled. The report also raises concerns about SoftBank-related financing and “circular” funding. Arm Sinks 10% in a Week on Phone Royalties and SoftBank: “Circular Financing Concerns”
• Negative Sentiment: CEO Rene Haas warned that resistance to U.S. AI data-center projects could push investment and jobs overseas, potentially slowing domestic infrastructure growth relevant to Arm’s opportunity. Arm CEO Warns US AI Data Center Pushback Could Send Jobs Abroad

Wall Street Analyst Weigh In

A number of analysts recently issued reports on ARM shares. The Goldman Sachs Group reissued a "sell" rating and set a $160.00 target price on shares of ARM in a research report on Thursday, November 5th. Jefferies Financial Group reaffirmed a "buy" rating and set a $320.00 price target on shares of ARM in a research report on Monday, July 20th. TD Cowen reduced their price target on shares of ARM from $350.00 to $250.00 and set a "buy" rating on the stock in a research report on Thursday, November 5th. Susquehanna boosted their price objective on shares of ARM from $300.00 to $320.00 and gave the stock a "positive" rating in a research note on Tuesday, July 21st. Finally, Barclays dropped their price objective on shares of ARM from $360.00 to $325.00 and set an "overweight" rating for the company in a research report on Thursday, November 5th. Nineteen investment analysts have rated the stock with a Buy rating, seven have given a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and an average price target of $291.72.

ARM Trading Up 12.1%

The firm has a 50-day moving average of $250.52 and a 200 day moving average of $230.60. The stock has a market capitalization of $217.20 billion, a price-to-earnings ratio of 233.75, a price-to-earnings-growth ratio of 5.09 and a beta of 3.93.

ARM (NASDAQ:ARM - Get Free Report) last issued its quarterly earnings data on Wednesday, November 4th. The company reported $0.52 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.48 by $0.04. ARM had a net margin of 17.13% and a return on equity of 11.57%. The company had revenue of $1.44 billion during the quarter, compared to the consensus estimate of $1.38 billion. During the same quarter last year, the company earned $0.39 earnings per share. ARM's revenue for the quarter was up 27.1% on a year-over-year basis. As a group, research analysts forecast that Arm Holdings PLC Sponsored ADR will post 1.17 EPS for the current year.

Insider Transactions at ARM

In other ARM news, CFO Jason Child sold 10,400 shares of the business's 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. The trade was a 6.35% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Institutional Trading of ARM

Several large investors have recently modified their holdings of the business. Advisors Asset Management Inc. acquired a new position in shares of ARM in the 3rd quarter valued at approximately $9,057,000. Edmond DE Rothschild Holding S.A. grew its position in shares of ARM by 22.6% during the third quarter. Edmond DE Rothschild Holding S.A. now owns 7,751 shares of the company's stock worth $2,245,000 after buying an additional 1,428 shares in the last quarter. Wilkinson Global Asset Management LLC acquired a new stake in shares of ARM during the third quarter worth approximately $411,000. USS Investment Management Ltd increased its stake in shares of ARM by 2.0% in the third quarter. USS Investment Management Ltd now owns 65,359 shares of the company's stock worth $18,932,000 after buying an additional 1,276 shares during the last quarter. Finally, Ieq Capital LLC increased its stake in shares of ARM by 16.5% in the third quarter. Ieq Capital LLC now owns 2,945 shares of the company's stock worth $853,000 after buying an additional 418 shares during the last quarter. 7.53% of the stock is currently owned by institutional investors and hedge funds.

ARM Company Profile

Arm Holdings plc designs and licenses semiconductor technology, including processor architectures and related intellectual property. Rather than manufacturing chips, the company licenses its designs and collects royalties on products that use them. Arm's offerings include Cortex CPUs, Mali graphics processors, Neoverse infrastructure platforms and other technology for applications ranging from smartphones and consumer electronics to automotive systems, the Internet of Things and cloud computing.

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