Upside case
Bull case
$104-76.3%
The bull case prices ARM at 48x on FY1 earnings, assuming continued execution and no meaningful deceleration in the core business.
Analysis OverviewBuyUpdated Jun 18, 2026
Arm Holdings plc American Depositary Shares (ARM) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Buy
Covering
27
analysts
20 bullish · 2 bearish · 27 covering ARM
Strong Buy
0
Buy
20
Hold
5
Sell
2
Strong Sell
0
Consensus Target
$271
-38.3% vs today
Scenario Range
$50 – $104
Model bear to bull value window
Coverage
27
Published analyst ratings
Valuation Context
202.1x
Forward P/E · Market cap $467.6B
ARM price targets
Three scenarios for where ARM stock could go
Current
~$439
Confidence
50 / 100
Updated
Jun 18, 2026
Where we are now
Current · $439
Bear
$50
Base
$79
Bull
$104
Market caseClosest to today
Base case
$79-82.0%
At 36x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$50-88.6%
If investor confidence fades or macro conditions deteriorate, a 179x multiple contraction could push ARM down roughly 89% from where it trades now.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Arm Holdings plc American Depositary Shares
ARM · NASDAQTechnologySemiconductorsMarch year-end
Arm Holdings designs and licenses semiconductor intellectual property — particularly CPU architectures — that power billions of chips worldwide. It generates revenue primarily through upfront licensing fees for its IP blueprints and ongoing royalty payments — typically a small percentage of chip value — from manufacturers who use its designs in their products. The company's moat stems from its ubiquitous architecture that has become the industry standard for mobile and embedded devices, creating a vast ecosystem that's difficult for competitors to displace.
Market Cap
$467.6B
Revenue TTM
$4.9B
Net Income TTM
$904M
Net Margin
18.4%
ARM Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
82%Exceptional
12 quarters tracked
Revenue Beat Rate
82%Exceptional
vs consensus estimates
Avg EPS Surprise
+1.0%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 3 of 4Q3 2025
EPS
$0.35/$0.35
Revenue
$1.1B/$1.1B
Q4 2025
EPS
$0.15/$0.33
Revenue
$1.1B/$1.1B
Q1 2026
EPS
$0.43/$0.41
Revenue
$1.2B/$1.2B
Q2 2026
EPS
$0.60/$0.58
Revenue
$1.5B/$1.5B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $0.35/$0.35 | +0.3% | $1.1B/$1.1B | -0.8% |
| Q4 2025 | $0.15/$0.33 | -54.4% | $1.1B/$1.1B | +1.6% |
| Q1 2026 | $0.43/$0.41 | +4.9% | $1.2B/$1.2B | +1.2% |
| Q2 2026 | $0.60/$0.58 | +3.4% | $1.5B/$1.5B | +1.1% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$5.9B
+20.3% YoY
FY2
$7.0B
+18.0% YoY
EPS Outlook
FY1
$1.48
+74.9% YoY
FY2
$1.76
+18.8% YoY
Trailing FCF (TTM)$972M
FCF Margin: 19.8%
Next Earnings
July 29, 2026
Expected EPS
$0.40
Expected Revenue
$1.3B
ARM beat EPS estimates in 3 of 4 tracked quarters. A strong delivery record supports forward estimate credibility.
ARM Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $4.0B
Product Mix
Latest annual revenue by segment or product family
Royalty
54.1%
+20.3% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
UNITED STATES
42.8%
+21.4% YoY
Tap, hover, or focus a slice to inspect segment detail.
Royalty is the largest disclosed segment at 54.1% of FY 2025 revenue, up 20.3% YoY.
UNITED STATES is the largest reported region at 42.8%, up 21.4% YoY.
ARM Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Expensive versus peers
Fair value est. $91 — implies -79.3% from today's price.
Premium to Fair Value
79.3%
above fair value
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
ARM
517.0x
vs
S&P 500
24.4x
+2015% premium
vs Technology Trailing P/E
ARM
517.0x
vs
Technology
29.0x
+1682% premium
vs ARM 5Y Avg P/E
Today
517.0x
vs
5Y Average
160.2x
+223% premium
Forward PE
202.1x
S&P 500
18.8x
+974%
Technology
22.3x
+808%
5Y Avg
—
—
Trailing PE
517.0x
S&P 500
24.4x
+2015%
Technology
29.0x
+1682%
5Y Avg
160.2x
+223%
PEG Ratio
—
S&P 500
1.66x
—
Technology
1.51x
—
5Y Avg
—
—
EV/EBITDA
402.1x
S&P 500
15.2x
+2544%
Technology
16.6x
+2319%
5Y Avg
—
—
Price/FCF
477.6x
S&P 500
20.7x
+2208%
Technology
19.2x
+2386%
5Y Avg
151.4x
+215%
Price/Sales
95.0x
S&P 500
3.1x
+2974%
Technology
2.4x
+3797%
5Y Avg
33.8x
+181%
Dividend Yield
—
S&P 500
1.91%
—
Technology
1.11%
—
5Y Avg
—
—
| Metric | ARM | S&P 500 | Technology | 5Y Avg ARM |
|---|---|---|---|---|
| Forward PE | 202.1x | 18.8x+974% | 22.3x+808% | — |
| Trailing PE | 517.0x | 24.4x+2015% | 29.0x+1682% | 160.2x+223% |
| PEG Ratio | — | 1.66x | 1.51x | — |
| EV/EBITDA | 402.1x | 15.2x+2544% | 16.6x+2319% | — |
| Price/FCF | 477.6x | 20.7x+2208% | 19.2x+2386% | 151.4x+215% |
| Price/Sales | 95.0x | 3.1x+2974% | 2.4x+3797% | 33.8x+181% |
| Dividend Yield | — | 1.91% | 1.11% | — |
ARM trades above S&P 500 benchmarks on 5 of 5 measured multiples — commands a broad premium across most valuation dimensions.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolARM Financial Health
Verdict
Strong
ARM generates $972M in free cash flow at a 19.8% margin — 12.3% ROIC signals a durable competitive advantage.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$4.9B
Revenue Growth
TTM vs prior year
+22.8%
Gross Margin
Gross profit as a share of revenue
94.6%
Operating Margin
Operating income divided by revenue
18.3%
Net Margin
Net income divided by revenue
18.4%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$0.85
Free Cash Flow (TTM)
Cash generation after capex
$972M
FCF Margin
FCF as share of revenue — the primary cash quality signal
19.8%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
12.3%
ROA
Return on assets, trailing twelve months
9.0%
Cash & Equivalents
Liquid assets on the balance sheet
$2.8B
Net Cash
Cash exceeds total debt — no net leverage
$2.3B
Debt Serviceability
Net debt as a multiple of annual free cash flow
Net cash ✓
ROE
Return on equity, trailing twelve months
11.9%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
0.0%
Dividend
—
Buyback
0.0%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$0
Dividend / Share
Annualized trailing dividend per share
—
Payout Ratio
Share of earnings distributed as dividends
—
Shares Outstanding
Current diluted share count
1.1B
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pageARM Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated June 17, 2026
High Risk
Valuation de-rating
The stock appears significantly overvalued relative to its intrinsic value based on discounted cash flow analysis, with a current price of $380.81 versus an estimated intrinsic value of $30.30.
High Risk
Industry volatility
The company faces extensive risks tied to volatility in the semiconductor and electronics industries, which could impact financial performance.
High Risk
Intense competition
Arm Holdings faces intense competition from x86 and open-source alternatives, which could erode market share and margins.
Medium
Analyst downside risk
Wall Street consensus price target of $223.00 implies a potential downside of -43.7% from the current trading price of $396.34.
Lower
Forward-looking uncertainty
The company's financial forecasts and targets discussed during earnings calls involve forward-looking information that may not materialize as expected.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why ARM Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated June 17, 2026
AI-driven growth
Arm's compute platforms are integral to advanced AI applications, with Armv9 adoption and AI-specific IP momentum driving demand.
Strong revenue growth
Q3 FY2026 revenue surged 26% to $1.242B, with royalty revenue up 27% to $737M, highlighting robust financial performance.
High-margin licensing
Arm's high-margin licensing business and secular growth remain intact, supporting long-term profitability.
Market leadership
Arm powers over 350 billion chips, trusted by leading tech firms like AWS, Microsoft, Google, Meta, and NVIDIA.
Consistent EPS outperformance
Arm has beaten EPS estimates 8 times in a row, reflecting strong operational execution.
Diversification beyond mobile
Arm's expansion into cloud, edge, and AI markets reduces reliance on mobile and drives new growth opportunities.
Technical consolidation potential
Analysts suggest disciplined entry points around $140-$145 for medium- to long-term upside.
Bullish price targets
Some forecasts project ARM stock surpassing $250-$350, driven by AI surge and Armv9 adoption.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
ARM Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$439.46
52W Range Position
96%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$100.02
+339.4% from the low
52-Week High
$452.61
-2.9% from the high
1 Month
+104.29%
3 Month
+242.37%
YTD
+283.0%
1 Year
+200.9%
3Y CAGR
+93.4%
5Y CAGR
+48.6%
10Y CAGR
+21.9%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
ARM vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
202.1x
vs 48.8x median
+314% above peer median
Revenue Growth
+20.3%
vs +5.1% median
+301% above peer median
Net Margin
18.4%
vs 8.9% median
+106% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
ARM ARM Arm Holdings plc American Depositary Shares | $467.6B | 202.1x | +20.3% | 18.4% | Buy | -38.3% |
CEV CEVA CEVA, Inc. | $1.4B | 94.2x | +3.6% | -10.5% | Buy | -8.7% |
SNP SNPS Synopsys, Inc. | $87.2B | 30.8x | +13.6% | 8.9% | Buy | +19.5% |
CDN CDNS Cadence Design Systems, Inc. | $107.0B | 48.8x | +16.1% | 20.9% | Buy | +6.6% |
QCO QCOM QUALCOMM Incorporated | $238.3B | 21.1x | +4.6% | 22.3% | Hold | -15.5% |
INT INTC Intel Corporation | $672.8B | 123.6x | +5.1% | -5.9% | Hold | -33.5% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
FAQ
7 questionsARM Investor Questions
Common questions answered from live analyst data and company financials.
01Is Arm Holdings plc American Depositary Shares (ARM) stock a buy or sell in 2026?
Arm Holdings plc American Depositary Shares (ARM) is rated Buy by Wall Street analysts as of 2026. Of 27 analysts covering the stock, 20 rate it Buy or Strong Buy, 5 rate it Hold, and 2 rate it Sell or Strong Sell. The consensus 12-month price target is $271, implying -38.3% from the current price of $439. The bear case scenario is $50 and the bull case is $104.
02What is the ARM stock price target for 2026?
The Wall Street consensus price target for ARM is $271 based on 27 analyst estimates. The high-end target is $500 (+13.8% from today), and the low-end target is $130 (-70.4%). The base case model target is $79.
03Is Arm Holdings plc American Depositary Shares (ARM) stock overvalued in 2026?
ARM trades at 202.1x times forward earnings. The stock trades at a notable premium to the broad market, which is typical for businesses with strong free cash flow and above-average growth expectations. Based on current multiples versus the peer group, the relative model signals expensive versus peers. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Arm Holdings plc American Depositary Shares (ARM) stock in 2026?
The primary risks for ARM in 2026 are: (1) Valuation de-rating — The stock appears significantly overvalued relative to its intrinsic value based on discounted cash flow analysis, with a current price of $380. (2) Industry volatility — The company faces extensive risks tied to volatility in the semiconductor and electronics industries, which could impact financial performance. (3) Intense competition — Arm Holdings faces intense competition from x86 and open-source alternatives, which could erode market share and margins. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Arm Holdings plc American Depositary Shares's revenue and earnings forecast?
Analyst consensus estimates ARM will report consensus revenue of $5.9B (+20.3% year-over-year) and EPS of $1.48 (+74.9% year-over-year) for the upcoming fiscal year. The following year, analysts project $7.0B in revenue.
06When does Arm Holdings plc American Depositary Shares (ARM) report its next earnings?
Arm Holdings plc American Depositary Shares is expected to report its next earnings on approximately 2026-07-29. Consensus expects EPS of $0.40 and revenue of $1.3B. Over recent quarters, ARM has beaten EPS estimates 82% of the time.
07How much free cash flow does Arm Holdings plc American Depositary Shares generate?
Arm Holdings plc American Depositary Shares (ARM) generated $972M in free cash flow over the trailing twelve months — a free cash flow margin of 19.8%. ARM returns capital to shareholders through and share repurchases ($0 TTM).