ARM (NASDAQ:ARM) Stock Falls 3% - What's Next?

Key Points

• ARM shares fell 3% to $228.77 on lower-than-average trading volume, while its elevated valuation included a P/E ratio of 235.85 and beta of 3.78.
• Analysts remain broadly positive, with a “Moderate Buy” consensus and an average price target of $303.32; targets range from $250 to $430.
• ARM reported quarterly revenue of $1.29 billion and EPS of $0.45, beating estimates, with revenue up 22.4% year over year. Institutional investors own 7.53% of the stock, while the CFO recently sold shares under a pre-arranged trading plan.

Shares of Arm Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report) were down 3% during trading on Thursday. The stock traded as low as $224.55 and last traded at $228.77. 4,536,887 shares traded hands during trading, a decline of 39% from the average daily volume of 7,448,674 shares. The stock had previously closed at $235.90.

Wall Street Analysts Forecast Growth

Several research firms have weighed in on ARM. KeyCorp increased their price target on shares of ARM from $300.00 to $430.00 and gave the company an "overweight" rating in a report on Tuesday, July 14th. Needham & Company LLC restated a "buy" rating and set a $255.00 price objective on shares of ARM in a report on Thursday, July 30th. Guggenheim reaffirmed a "buy" rating and issued a $255.00 target price on shares of ARM in a research report on Thursday, July 30th. Rosenblatt Securities decreased their target price on ARM from $270.00 to $250.00 and set a "buy" rating on the stock in a research report on Friday, July 31st. Finally, UBS Group lowered their target price on ARM from $360.00 to $320.00 and set a "buy" rating on the stock in a research note 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 company. According to data from MarketBeat.com, the stock has an average rating of "Moderate Buy" and an average target price of $303.32.

ARM Price Performance

The firm has a market capitalization of $244.34 billion, a P/E ratio of 235.85, a price-to-earnings-growth ratio of 6.24 and a beta of 3.78. The business's 50-day moving average is $260.04 and its 200 day moving average is $226.86.

ARM (NASDAQ:ARM - Get Free Report) last posted its quarterly earnings data 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 firm had revenue of $1.29 billion during the quarter, compared to the consensus estimate of $1.26 billion. During the same quarter in the previous year, the firm posted $0.35 EPS. The business's revenue for the quarter was up 22.4% compared to the same quarter last year. Analysts anticipate that Arm Holdings PLC Sponsored ADR will post 1.15 EPS for the current fiscal year.

Insider Buying and Selling at ARM

In other news, CFO Jason Child sold 10,400 shares of ARM stock in a transaction that occurred 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 completion of the sale, the chief financial officer directly owned 153,442 shares in the company, valued at approximately $46,032,600. The trade was a 6.35% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Institutional Investors Weigh In On ARM

A number of large investors have recently added to or reduced their stakes in the stock. Bank Julius Baer & Co. Ltd Zurich grew its position in ARM by 1.4% during the 3rd quarter. Bank Julius Baer & Co. Ltd Zurich now owns 79,931 shares of the company's stock worth $23,161,000 after acquiring an additional 1,137 shares during the last quarter. Sumitomo Mitsui Trust Group Inc. raised its position in ARM by 2.6% in the third quarter. Sumitomo Mitsui Trust Group Inc. now owns 86,297 shares of the company's stock valued at $24,997,000 after purchasing an additional 2,197 shares during the last quarter. Mirae Asset Global Investments Co. Ltd. bought a new position in ARM in the third quarter valued at about $179,998,000. ProShare Advisors LLC raised its position in ARM by 2.2% in the third quarter. ProShare Advisors LLC now owns 421,817 shares of the company's stock valued at $122,184,000 after purchasing an additional 9,242 shares during the last quarter. Finally, Vise Technologies Inc. acquired a new stake in shares of ARM during the third quarter valued at about $408,000. Institutional investors and hedge funds own 7.53% of the company's stock.

About ARM

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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