Arm Holdings is a UK-based semiconductor design company founded in 1990 as Advanced RISC Machines Ltd, by Jamie Urquhart, Mike Muller, Tudor Brown, Lee Smith, John Biggs, Harry Oldham, Dave Howard, Pete Harrod, Harry Meekings, Al Thomas, Andy Merritt and David Seal.
Arm architects, develops and licenses central processing unit (CPU), graphic processing unit (GPU) and neural processing unit (NPU) products and related technologies for semiconductor companies and original equipment manufacturers (OEMs). Japanese investment holding company, SoftBank, acquired Arm in 2016 and took the company private after nearly 20 years as a public company. Arm once again went public on September 14, 2023.
According to Arm, it’s shipped more than 250 billion Arm-based chips since its inception. The company also announced on September 5, 2023, that it had entered into a new long-term agreement with Apple Inc. The partnership gives Apple access to the Arm architecture, which it uses in its iPhone and Mac chips, beyond 2040.
April 22, 2024: After a stock price correction, Arm's share price has rallied slightly as news came out that SoftBank plans to spend almost $1 billion to upgrade data centres and develop Japanese-language generative AI.
Only you can make the decision on the time to leap... but here's some supporting information and analysis.
Historical closes compared with the last close of $97.93
| 1 week (2024-04-18) | 12.32% |
|---|---|
| 1 month (2024-03-26) | -22.04% |
| 3 months (2024-01-25) | 37.60% |
| 6 months (2023-10-26) | 99.49% |
| 1 year (2023-04-20) | N/A |
| 3 years (2021-04-20) | N/A |
The gauge below shows real-time ratings that are based on 26 popular indicators such as moving averages, for specific time periods. It's not a recommendation but is simply technical analysis that can form part of your research.
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Valuing a stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of overall performance. However, analysts commonly use some key metrics to help gauge value. Check out the Arm P/E ratio, PEG ratio and EBITDA
Arm's current stock price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 1389x. In other words, Arm stocks trade at around 1389x recent earnings.
That's relatively high compared to, say, the trailing 12-month P/E ratio for the United States stock markets on average as of November 09, 2023 (20.44). The high P/E ratio could mean that investors are optimistic about the outlook for the shares or simply that they're over-valued.
However, Arm's P/E ratio is best considered in relation to those of others within the industry or those of similar companies.
Arm's "price/earnings-to-growth ratio" can be calculated by dividing its P/E ratio by its growth – to give 2.2893. A PEG ratio over 1 can be interpreted as meaning shares are overvalued at the current rate of growth, or may anticipate an acceleration in growth.
The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into Arm's future profitability. By accounting for growth, it could also help you if you're comparing the stock prices of multiple high-growth companies.
However, it's sensible to consider Arm's PEG ratio in relation to those of similar companies.
Arm's EBITDA (earnings before interest, taxes, depreciation and amortisation) is $244.5 million.
The EBITDA is a measure of a Arm's overall financial performance and is widely used to measure a its profitability.
To put that into context you can compare it against similar companies.
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