ARM (NASDAQ:ARM) Stock Falls 3.1% - Here's What Happened

Key Points

• ARM shares fell 3.1% to $221.06, trading below both the 50-day and 200-day moving averages. The stock carries a high valuation, with a price-to-earnings ratio of 227.90 and beta of 3.78.
• Analysts remain broadly positive, with a consensus rating of “Moderate Buy” and an average price target of $303.32, despite several firms recently lowering their targets.
• ARM exceeded quarterly expectations, reporting $0.45 in earnings per share versus $0.40 expected and $1.29 billion in revenue. Revenue increased 22.4% year over year, while CFO Jason Child sold shares worth $3.12 million under a pre-arranged trading plan.

Arm Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report) shares fell 3.1% during trading on Tuesday. The company traded as low as $217.26 and last traded at $221.06. Approximately 5,068,950 shares were traded during mid-day trading, a decline of 33% from the average daily volume of 7,566,435 shares. The stock had previously closed at $228.05.

Analyst Ratings Changes

ARM has been the topic of several recent analyst reports. Needham & Company LLC reiterated a "buy" rating and set a $255.00 target price on shares of ARM in a report on Thursday, July 30th. UBS Group lowered their price target on ARM from $360.00 to $320.00 and set a "buy" rating for the company in a report on Thursday, July 30th. Rosenblatt Securities dropped their price target on ARM from $270.00 to $250.00 and set a "buy" rating on the stock in a research report on Friday, July 31st. Royal Bank Of Canada cut their price objective on ARM from $475.00 to $340.00 and set an "outperform" rating on the stock in a report on Thursday, July 30th. Finally, New Street Research upgraded ARM from a "neutral" rating to a "buy" rating and set a $260.00 price objective for the company in a research report on Thursday, July 30th. One research 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. Based on data from MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus price target of $303.32.

ARM Trading Down 3.1%

The stock's 50 day moving average is $266.47 and its two-hundred day moving average is $270.79. The stock has a market capitalization of $236.11 billion, a price-to-earnings ratio of 227.90, a price-to-earnings-growth ratio of 6.76 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, beating analysts' consensus estimates of $0.40 by $0.05. The company had revenue of $1.29 billion for the quarter, compared to analyst estimates of $1.26 billion. ARM had a return on equity of 12.24% and a net margin of 20.25%. The company's quarterly revenue was up 22.4% compared to the same quarter last year. During the same period in the previous year, the company posted $0.35 earnings per share. On average, research analysts anticipate 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 transaction of $3,120,000.00. Following the completion of the transaction, the chief financial officer owned 153,442 shares of the company's stock, valued at $46,032,600. This represents a 6.35% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Institutional Trading of ARM

A number of institutional investors have recently made changes to their positions in ARM. Arrowstreet Capital Limited Partnership lifted its position in ARM by 1,203.5% during the first quarter. Arrowstreet Capital Limited Partnership now owns 945,152 shares of the company's stock worth $142,983,000 after acquiring an additional 872,644 shares during the last quarter. Janus Henderson Group PLC bought a new stake in shares of ARM during the first quarter worth approximately $116,112,000. SG Americas Securities LLC grew its position in shares of ARM by 265.6% in the first quarter. SG Americas Securities LLC now owns 971,067 shares of the company's stock valued at $146,903,000 after purchasing an additional 705,459 shares during the last quarter. Altshuler Shaham Ltd grew its position in shares of ARM by 202.6% in the first quarter. Altshuler Shaham Ltd now owns 478,289 shares of the company's stock valued at $72,356,000 after purchasing an additional 320,236 shares during the last quarter. Finally, Liontrust Investment Partners LLP increased its stake in shares of ARM by 139.7% during the first quarter. Liontrust Investment Partners LLP now owns 347,339 shares of the company's stock worth $52,545,000 after purchasing an additional 202,410 shares during the period. 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 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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