MODEL VERDICT
Arm Holdings plc American Depositary Shares (ARM)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
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Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | NEUTRAL | 0.14 | $211.18 | CURRENT | — |
| Apr 24, 2026 | NEUTRAL | 0.13 | $234.81 | CURRENT | — |
| Apr 17, 2026 | NEUTRAL | 0.14 | $166.73 | CURRENT | — |
| Apr 16, 2026 | NEUTRAL | 0.14 | $159.34 | CURRENT | — |
| Apr 10, 2026 | NEUTRAL | 0.15 | $148.93 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 10 analyst estimates | $83.85 | -60.3% | 20% | A- | Analyst Est. |
| EV/EBITDA 8 industry peers | $54.15 | -74.4% | 20% | A- | Peer Data |
| Industry Median P/E 7 industry peers | $42.42 | -79.9% | 15% | A | Peer Data |
| Price / Free Cash Flow 8 industry peers | $11.66 | -94.5% | 15% | B+ | Peer Data |
| EV/EBIT 7 industry peers | $74.64 | -64.7% | 8% | B+ | Peer Data |
| EV/FCF 8 industry peers | $13.91 | -93.4% | 7% | B | Model Driven |
| EV To Revenue 10 industry peers | $60.02 | -71.6% | 4% | B | Data |
| Price / Sales 10 industry peers | $55.52 | -73.7% | 3% | B | Model Driven |
| Earnings Yield 7 industry peers | $40.83 | -80.7% | 2% | B | Data |
| FCF Yield 9 industry peers | $9.96 | -95.3% | 1% | B | Data |
| Weighted Output Blended model output | $87.64 | -58.5% | 100% | 56 | SIGNIFICANTLY OVERVALUED |
| EPS Growth ↓ | P/E Multiple → | 236× | 259× | 282× (Current) | 305× | 328× |
|---|---|---|---|---|---|
| Bear Case (4%) | $184 | $202 | $220 | $238 | $256 |
| Conservative (7%) | $189 | $207 | $225 | $244 | $262 |
| Base Case (10.0%) | $195 | $214 | $233 | $252 | $271 |
| Bull Case (14%) | $201 | $220 | $240 | $260 | $279 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 239.49 | 147.35 | 145.75 | 425.38 | 160.98 |
| EV/EBIT | 290.56 | 158.98 | 112.93 | 599.77 | 268.78 |
| EV/EBITDA | 229.95 | 113.35 | 89.33 | 487.17 | 223.08 |
| P/FCF | 302.74 | 136.06 | 119.36 | 652.79 | 303.27 |
| P/FFO | 168.53 | 119.19 | 111.07 | 275.32 | 92.57 |
| P/TBV | 31.06 | 33.63 | 22.93 | 36.63 | 7.20 |
| P/AFFO | 209.61 | 157.90 | 128.26 | 342.68 | 116.19 |
| P/B Ratio | 20.12 | 19.03 | 16.99 | 24.33 | 3.79 |
| P/S Ratio | 32.55 | 29.00 | 28.78 | 39.85 | 6.33 |
Based on our peer multiples analysis with 26 valuation metrics, the model estimates ARM's fair value at $87.64 vs the current price of $211.18, implying -58.5% downside potential. Model verdict: Significantly Overvalued. Confidence: 56/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $87.64 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $59.88 (P10) to $111.95 (P90), with a median of $85.23.
ARM's current P/E of 281.6x compares to the industry median of 56.6x (7 peers in the group). This represents a +397.8% premium to the industry. The historical average P/E is 239.5x over 3 years. Signal: High Premium.
27 analysts cover ARM with a consensus rating of Buy. The consensus price target is $163.75 (range: $120.00 — $210.00), implying -22.5% upside from the current price. Grade breakdown: Strong Buy (0), Buy (20), Hold (5), Sell (2), Strong Sell (0).
The model confidence score is 56/100, based on: data completeness (15), peer quality (25), historical depth (10), earnings stability (4), and model agreement (2). Cyclicality penalty: -0 points. The model shows moderate agreement across inputs.
The model flags several key risks: (1) Multiple compression: ARM trades at the 9790th percentile of its historical P/E range. A reversion to median (239.5×) would imply significant downside. (2) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that ARM's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of -0.0σ, meaning margins are 0.0 standard deviations below their historical average. If margins revert to the 3-year mean (19.7%), the model estimates fair value drops by 1110.0% to approximately $188. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.