Latest Ratios: P/E Ratio 392.0x · EV/EBITDA 304.4x · ROE 12.0%. (2022–2026 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|---|
| Market Cap | $354.5B | $161.6B | $113.5B | $130.6B | — | — |
| Enterprise Value | $352.2B | $159.3B | $111.8B | $128.9B | — | — |
| P/E Ratio → | 392.00 | 177.98 | 142.39 | 431.00 | — | — |
| P/S Ratio | 72.06 | 32.84 | 28.33 | 40.38 | — | — |
| P/B Ratio | 42.95 | 19.50 | 16.60 | 24.66 | — | — |
| P/FCF | 362.13 | 165.03 | 637.74 | 137.86 | — | — |
| P/OCF | 232.63 | 106.02 | 285.94 | 119.77 | — | — |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|---|
| EV / Revenue | — | 32.37 | 27.90 | 39.86 | — | — |
| EV / EBITDA | 304.43 | 137.66 | 110.69 | 493.70 | — | — |
| EV / EBIT | 387.92 | 137.66 | 155.26 | 607.81 | — | — |
| EV / FCF | — | 162.69 | 628.03 | 136.07 | — | — |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|---|
| Gross Margin | 92.5% | 92.5% | 94.9% | 92.8% | 92.7% | 91.9% |
| Operating Margin | 18.5% | 18.5% | 20.6% | 3.1% | 25.3% | 25.2% |
| Net Profit Margin | 18.4% | 18.4% | 19.8% | 9.5% | 19.6% | 20.3% |
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|---|
| ROE | 12.0% | 12.0% | 13.1% | 6.5% | 13.8% | 15.5% |
| ROA | 9.2% | 9.2% | 9.4% | 4.1% | 7.8% | 8.4% |
| ROIC | 12.3% | 12.3% | 14.2% | 2.4% | 18.4% | 18.2% |
| ROCE | 10.3% | 10.3% | 11.5% | 1.7% | 12.8% | 13.3% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|---|
| Debt / Equity | 0.06 | 0.06 | 0.05 | 0.04 | 0.05 | 0.07 |
| Debt / EBITDA | 0.39 | 0.39 | 0.35 | 0.87 | 0.26 | 0.30 |
| Net Debt / Equity | — | -0.28 | -0.25 | -0.32 | -0.33 | -0.21 |
| Net Debt / EBITDA | -1.98 | -1.98 | -1.71 | -6.50 | -1.57 | -0.87 |
| Debt / FCF | — | -2.34 | -9.71 | -1.79 | -2.07 | -1.94 |
| Interest Coverage | — | — | — | — | — | — |
Net cash position: cash ($2.8B) exceeds total debt ($457M)
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|---|
| Current Ratio | 6.00 | 6.00 | 5.20 | 2.79 | 2.60 | 2.22 |
| Quick Ratio | 6.00 | 6.00 | 5.20 | 2.79 | 2.60 | 2.22 |
| Cash Ratio | 3.46 | 3.46 | 3.04 | 1.94 | 1.63 | 1.17 |
| Asset Turnover | — | 0.46 | 0.45 | 0.41 | 0.39 | 0.42 |
| Inventory Turnover | — | — | — | — | — | — |
| Days Sales Outstanding | — | 182.95 | 172.89 | 127.46 | 158.73 | 174.20 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|---|
| Dividend Yield | — | — | — | — | — | — |
| Payout Ratio | — | — | — | — | — | — |
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|---|
| Earnings Yield | 0.3% | 0.6% | 0.7% | 0.2% | — | — |
| FCF Yield | 0.3% | 0.6% | 0.2% | 0.7% | — | — |
| Buyback Yield | 0.0% | 0.0% | 0.0% | 0.0% | — | — |
| Total Shareholder Yield | 0.0% | 0.0% | 0.0% | 0.0% | — | — |
| Shares Outstanding | — | $1.1B | $1.1B | $1.0B | $1.0B | $1.0B |
Includes 30+ ratios · 5 years · Updated daily
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10-year return with dividends reinvested.
Compare growth, multiples, and margins vs sector.
Quick answers to the most common questions about buying ARM stock.
Arm Holdings plc American Depositary Shares's current P/E ratio is 392.0x. The historical average is 160.2x. This places it at the 100th percentile of its historical range.
Arm Holdings plc American Depositary Shares's current EV/EBITDA is 304.4x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA.
Arm Holdings plc American Depositary Shares's return on equity (ROE) is 12.0%. The historical average is 12.2%.
Based on historical data, Arm Holdings plc American Depositary Shares is trading at a P/E of 392.0x. This is at the 100th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Arm Holdings plc American Depositary Shares has 92.5% gross margin and 18.5% operating margin. Operating margin between 10-20% is typical for established companies.
Arm Holdings plc American Depositary Shares's Debt/EBITDA ratio is 0.4x, indicating low leverage. A ratio below 2x is generally considered financially healthy.
Key Metrics
Top Statement Risk
SBC dilution and R&D intensity
Premium Pricing for Royalty Inflection
ARM trades at 281.99x trailing P/E and 218.44x EV/EBITDA, per current market data, far above semiconductor peers, implying the market expects sustained high growth from royalty momentum.
The forward P/E of 107.72x suggests investors are pricing in substantial earnings growth, likely driven by the recent acceleration in royalty revenue. Compared to peers like AMD at 179.68x P/E and CDNS at 83.75x, ARM's premium is justified only if its operating leverage continues to expand margins toward the 30% levels seen in 2026Q4. The absence of a PEG ratio limits growth-adjusted comparison, but the sheer multiple implies expectations of near-perfect execution.
Margin Volatility Masks Underlying Strength
Gross margin averaged 95.2% over ten quarters, per financial statements, but operating margin swung from 2.2% to 33.0%, reflecting timing of licensing and SBC charges, indicating true earning power is higher than recent quarters suggest.
The 97.2% gross margin in 2027Q1 underscores the asset-light model, yet operating margin fell to 7.6% due to a spike in R&D and SBC. Net margin remained resilient at 20.9%, benefiting from tax effects and other income. Investors should focus on the trend in operating margin excluding SBC, which appears to be improving on a year-over-year basis, as evidenced by the 2026Q4 record of 29.5%.
ROIC Recovery on Asset Expansion
ROIC improved to 5.6% in 2026Q4 from 0.4% in 2024Q4, as per reported figures, but remains low due to a growing asset base, suggesting returns are still ramping up.
The increase in ROIC is driven by margin expansion rather than asset efficiency, as asset turnover has remained flat around 0.12. The rise in PPE investment to $1.4B, per the balance sheet, has temporarily depressed returns, but if revenue growth continues at 22% and margins hold, ROIC should trend higher. ROE has been stable in the 2-4% range, reflecting the large equity base from retained earnings and SBC-related credits.
Working Capital Swings Distort Efficiency
DSO averaged 144 days over ten quarters, per financial statements, while DPO varied widely, causing CCC to swing from negative to positive, indicating significant timing effects in collections and payments.
The high DSO reflects the licensing model with milestone-based payments, but the volatility in DPO (from 43 to 219 days) suggests ARM has flexibility in managing supplier payments. The negative CCC in some quarters indicates that ARM collects cash before paying suppliers, a sign of strong bargaining power. However, the swings make quarterly efficiency metrics unreliable; investors should monitor the trend over multiple quarters.
Minimal Debt Masks Strategic Flexibility
D/E stands at 0.05 with D/EBITDA of 2.68 in 2027Q1, per balance sheet data, indicating low leverage, but the rise in debt from $226M to $464M suggests a deliberate increase in financial flexibility.
Interest coverage is not reported, but given the low debt levels and strong cash generation, debt service appears comfortable. The increase in debt is minor relative to the $3.1B cash balance, so leverage is not a concern. However, the D/EBITDA spike to 2.68 in 2027Q1 is due to a temporary drop in EBITDA, not a structural shift, and should normalize as margins recover.
Fortress Liquidity with Minimal Inventory Risk
Current ratio improved to 5.25 in 2027Q1 from 2.79 in 2024Q4, per balance sheet data, with cash at $3.1B, indicating ample liquidity to fund R&D and weather any downturn.
The quick ratio equals the current ratio, reflecting negligible inventory, consistent with an IP licensing model. The liquidity buffer provides a cushion for the volatile working capital swings seen in cash flow. Even under a severe stress scenario, ARM could sustain operations for multiple quarters without external funding, given its low fixed-cost base and high gross margins.
P/E Misleads on ARM's Earnings Power
The trailing P/E of 281.99x, per market data, is distorted by SBC and tax items, obscuring ARM's true cash-generative earnings; EV/EBITDA or P/FCF may be more appropriate.
ARM's reported net income is heavily impacted by stock-based compensation, which is a non-cash expense but still dilutes shareholders. The P/E ratio fails to capture the cash flow generation, as evidenced by the 53.8% FCF margin in 2027Q1. Investors should use EV/EBITDA or P/FCF, but even those are elevated, reflecting the market's pricing of long-term royalty growth. The most misapplied ratio is P/E because it understates earnings power when SBC is high and tax rates are volatile.