Evaluating ARM Holdings: Insights From 8 Financial Analysts

Across the recent three months, 8 analysts have shared their insights on ARM Holdings ARM, expressing a variety of opinions spanning from bullish to bearish.

The following table provides a quick overview of their recent ratings, highlighting the changing sentiments over the past 30 days and comparing them to the preceding months.

Providing deeper insights, analysts have established 12-month price targets, indicating an average target of $151.75, along with a high estimate of $190.00 and a low estimate of $92.00. Surpassing the previous average price target of $123.12, the current average has increased by 23.25%.

Diving into Analyst Ratings: An In-Depth Exploration

The standing of ARM Holdings among financial experts becomes clear with a thorough analysis of recent analyst actions. The summary below outlines key analysts, their recent evaluations, and adjustments to ratings and price targets.

Key Insights:

• Action Taken: Analysts adapt their recommendations to changing market conditions and company performance. Whether they 'Maintain', 'Raise' or 'Lower' their stance, it reflects their response to recent developments related to ARM Holdings. This information provides a snapshot of how analysts perceive the current state of the company.
• Rating: Analysts unravel qualitative evaluations for stocks, ranging from 'Outperform' to 'Underperform'. These ratings offer insights into expectations for the relative performance of ARM Holdings compared to the broader market.
• Price Targets: Analysts predict movements in price targets, offering estimates for ARM Holdings's future value. Examining the current and prior targets offers insights into analysts' evolving expectations.

Capture valuable insights into ARM Holdings's market standing by understanding these analyst evaluations alongside pertinent financial indicators. Stay informed and make strategic decisions with our Ratings Table.

Stay up to date on ARM Holdings analyst ratings.

Discovering ARM Holdings: A Closer Look

Arm Holdings is the IP owner and developer of the ARM architecture (ARM stands for Acorn RISC Machine), which is used in 99% of the world's smartphone CPU cores, and it also has high market share in other battery-powered devices like wearables, tablets, or sensors. Arm licenses its architecture for a fee, offering different types of licenses depending on the flexibility the customer needs. Customers like Apple or Qualcomm buy architectural licenses, which allows them to modify the architecture and add or delete instructions to tailor the chips to their specific needs. Other clients directly buy off-the-shelf designs from Arm. Off-the-shelf and architectural customers pay a royalty fee per chip shipped.

Understanding the Numbers: ARM Holdings's Finances

Market Capitalization Analysis: The company exhibits a lower market capitalization profile, positioning itself below industry averages. This suggests a smaller scale relative to peers.

Positive Revenue Trend: Examining ARM Holdings's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 46.6% as of 31 March, 2024, showcasing a substantial increase in top-line earnings. As compared to competitors, the company surpassed expectations with a growth rate higher than the average among peers in the Information Technology sector.

Net Margin: ARM Holdings's net margin surpasses industry standards, highlighting the company's exceptional financial performance. With an impressive 24.14% net margin, the company effectively manages costs and achieves strong profitability.

Return on Equity (ROE): ARM Holdings's ROE excels beyond industry benchmarks, reaching 4.35%. This signifies robust financial management and efficient use of shareholder equity capital.

Return on Assets (ROA): ARM Holdings's financial strength is reflected in its exceptional ROA, which exceeds industry averages. With a remarkable ROA of 2.98%, the company showcases efficient use of assets and strong financial health.

Debt Management: ARM Holdings's debt-to-equity ratio is below the industry average at 0.04, reflecting a lower dependency on debt financing and a more conservative financial approach.

Understanding the Relevance of Analyst Ratings

Analysts are specialists within banking and financial systems that typically report for specific stocks or within defined sectors. These people research company financial statements, sit in conference calls and meetings, and speak with relevant insiders to determine what are known as analyst ratings for stocks. Typically, analysts will rate each stock once a quarter.

In addition to their assessments, some analysts extend their insights by offering predictions for key metrics such as earnings, revenue, and growth estimates. This supplementary information provides further guidance for traders. It is crucial to recognize that, despite their specialization, analysts are human and can only provide forecasts based on their beliefs.

This article was generated by Benzinga's automated content engine and reviewed by an editor.