ARM (NASDAQ:ARM) Stock Price Down 10% - What's Next?

Key Points

• ARM shares fell 10% to $205.97 in heavy trading, with volume about 39% above the average. The stock is trading below its 50-day moving average of $259.62 and near its 200-day average of $227.44.
• Despite the decline, analysts maintain a consensus “Moderate Buy” rating with an average price target of $303.32. Recent targets range from $166 to $430.
• ARM reported stronger-than-expected quarterly results, including $0.45 in EPS and $1.29 billion in revenue, up 22.4% year over year. However, its valuation remains elevated at a P/E ratio above 212, and 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 dropped 10% during trading on Friday. The stock traded as low as $198.77 and last traded at $205.97. Approximately 10,401,548 shares traded hands during mid-day trading, an increase of 39% from the average daily volume of 7,463,668 shares. The stock had previously closed at $228.77.

Wall Street Analyst Weigh In

Several research analysts have issued reports on ARM shares. New Street Research upgraded ARM from a "neutral" rating to a "buy" rating and set a $260.00 price target on the stock in a report on Thursday, July 30th. Raymond James Financial restated an "outperform" rating and set a $166.00 price objective on shares of ARM in a report on Tuesday, August 25th. KeyCorp boosted their price objective on ARM from $300.00 to $430.00 and gave the company an "overweight" rating in a report on Tuesday, July 14th. Needham & Company LLC reaffirmed a "buy" rating and set a $255.00 target price on shares of ARM in a research report on Thursday, July 30th. Finally, Rosenblatt Securities cut their target price on ARM from $270.00 to $250.00 and set a "buy" rating on the stock in a report on Friday, July 31st. One investment 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 company. Based on data from MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and an average price target of $303.32.

ARM Trading Down 10.0%

The stock has a market capitalization of $219.99 billion, a PE ratio of 212.34, a P/E/G ratio of 7.00 and a beta of 3.78. The stock's fifty day simple moving average is $259.62 and its 200-day simple moving average is $227.44.

ARM (NASDAQ:ARM - Get Free Report) last announced its earnings results on Thursday, July 30th. The company reported $0.45 EPS for the quarter, beating the consensus estimate 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 during the quarter, compared to the consensus estimate of $1.26 billion. During the same quarter in the prior year, the company posted $0.35 earnings per share. The firm's revenue for the quarter was up 22.4% on a year-over-year basis. As a group, analysts anticipate 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 stock in a transaction dated 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 owned 153,442 shares in the company, valued at approximately $46,032,600. This trade represents a 6.35% decrease in their position. The transaction was disclosed in a filing with the SEC, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Hedge Funds Weigh In On ARM

A number of hedge funds and other institutional investors have recently modified their holdings of ARM. Provenance Wealth Advisors LLC purchased a new stake in ARM during the third quarter worth about $522,000. Factory Mutual Insurance Co. raised its position in ARM by 61.3% in the third quarter. Factory Mutual Insurance Co. now owns 17,900 shares of the company's stock worth $5,185,000 after acquiring an additional 6,800 shares during the period. BOCHK Asset Management Ltd raised its position in ARM by 205.0% in the third quarter. BOCHK Asset Management Ltd now owns 20,432 shares of the company's stock worth $5,918,000 after acquiring an additional 13,732 shares during the period. Signature Equity Partners LLC increased its stake in shares of ARM by 89.1% during the 3rd quarter. Signature Equity Partners LLC now owns 1,917 shares of the company's stock worth $555,000 after purchasing an additional 903 shares during the last quarter. Finally, Bank Julius Baer & Co. Ltd Zurich lifted its stake in ARM by 1.4% in the third quarter. Bank Julius Baer & Co. Ltd Zurich now owns 79,931 shares of the company's stock valued at $23,161,000 after purchasing an additional 1,137 shares during the last quarter. Hedge funds and other 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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