ARM (NASDAQ:ARM) Stock Falls 7.3% - What's Next?

Key Points

• ARM shares fell 7.3% to $210.10 in mid-day trading, well below their 50-day and 200-day moving averages of $263.24 and $272.23, respectively.
• Analysts maintain a generally positive outlook, with a consensus rating of “Moderate Buy” and an average price target of $303.32, despite ratings ranging from Sell to Strong Buy.
• ARM recently exceeded quarterly expectations, reporting $0.45 in EPS versus $0.40 expected and $1.29 billion in revenue, up 22.4% year over year; CFO Jason Child separately sold $3.12 million worth of shares under a pre-arranged trading plan.

Arm Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report)'s share price traded down 7.3% during mid-day trading on Thursday. The stock traded as low as $208.30 and last traded at $210.10. Approximately 5,715,850 shares traded hands during mid-day trading, a decline of 24% from the average daily volume of 7,537,028 shares. The stock had previously closed at $226.59.

Analyst Ratings Changes

A number of research analysts recently weighed in on ARM shares. Guggenheim restated a "buy" rating and set a $255.00 target price on shares of ARM in a research note on Thursday, July 30th. Weiss Ratings reissued a "hold (c)" rating on shares of ARM in a research report on Thursday, October 15th. Morgan Stanley increased their price target on ARM from $202.00 to $212.00 and gave the stock an "equal weight" rating in a report on Thursday, July 30th. Susquehanna upped their target price 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, 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. One investment 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. According to MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus price target of $303.32.

ARM Trading Down 7.3%

The stock has a 50-day moving average price of $263.24 and a two-hundred day moving average price of $272.23. The stock has a market cap of $224.40 billion, a price-to-earnings ratio of 216.60, a PEG ratio of 6.56 and a beta of 3.78.

ARM (NASDAQ:ARM - Get Free Report) last announced its earnings results on Thursday, July 30th. The company reported $0.45 earnings per share (EPS) for the quarter, beating the consensus estimate 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 firm's quarterly revenue was up 22.4% compared to the same quarter last year. During the same period in the prior year, the company posted $0.35 EPS. Research analysts predict that Arm Holdings PLC Sponsored ADR will post 1.15 earnings per share for the current fiscal year.

Insider Transactions at ARM

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 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 approximately $46,032,600. This represents a 6.35% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Hedge Funds Weigh In On ARM

Hedge funds have recently made changes to their positions in the company. SeaCrest Wealth Management LLC lifted its position in ARM by 19.9% during the third quarter. SeaCrest Wealth Management LLC now owns 855 shares of the company's stock valued at $248,000 after purchasing an additional 142 shares during the period. Cantor Fitzgerald Investment Advisors L.P. acquired a new stake in ARM during the 3rd quarter worth about $2,468,000. Kings Path Partners LLC purchased a new position in shares of ARM during the 3rd quarter valued at about $29,000. Crossmark Global Holdings Inc. raised its stake in shares of ARM by 10.9% during the 3rd quarter. Crossmark Global Holdings Inc. now owns 6,022 shares of the company's stock valued at $1,744,000 after buying an additional 592 shares during the last quarter. Finally, Capstone Capital Management Ltd purchased a new position in shares of ARM during the 3rd quarter valued at about $1,252,000. 7.53% of the stock is owned by institutional investors and hedge funds.

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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