Don't Buy Arm Before Checking Its Fundamentals!

By Scott Lee • Thursday, September 12 07:54 • Permanent Link

Arm marked a 10.3% change today, compared to 1.0% for the S&P 500. Is it a good value at today's price of $140.32? Only an in-depth analysis can answer that question, but here are some facts that can give you an idea:

Arm Holdings plc architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers rely on to develop products.
Arm belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 31.58 and an average price to book (P/B) of 4.11
The company's P/B ratio is 25.97
Arm has a trailing 12 month Price to Earnings (P/E) ratio of 342.2 based on its trailing 12 month price to earnings (EPS) of $0.41 per share
Its forward P/E ratio is 67.8, based on its forward earnings per share (EPS) of $2.07
ARM has a Price to Earnings Growth (PEG) ratio of 2.87, which shows the company is overvalued when we factor growth into the price to earnings calculus.
Over the last four years, Arm has averaged free cash flows of $516.0 Million, which on average grew 90.5%
Over the last four years the company's operating margins have averaged 17.7 % and during this time they had a growth rate of -65.4 % and a coefficient of variability of 113.31 %.
Arm has moved 120.7% over the last year compared to 23.3% for the S&P 500 -- a difference of 97.4%
ARM has an average analyst rating of buy and is 4.33% away from its mean target price of $134.5 per share

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.