Arm Holdings Valuation

Is ARM undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

0/6

Valuation Score 0/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of ARM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ARM ($137.03) is trading above our estimate of fair value ($56.93)

Significantly Below Fair Value: ARM is trading above our estimate of fair value.


Key Valuation Metric

Which metric is best to use when looking at relative valuation for ARM?

Other financial metrics that can be useful for relative valuation.

ARM key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue40.1x
Enterprise Value/EBITDA472.7x
PEG Ratio10.5x

Price to Sales Ratio vs Peers

How does ARM's PS Ratio compare to its peers?

The above table shows the PS ratio for ARM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PSEstimated GrowthMarket Cap
Peer Average8.2x
QCOM QUALCOMM
5x8.8%US$184.7b
TXN Texas Instruments
11.5x9.9%US$184.1b
MU Micron Technology
4.4x17.7%US$111.2b
ADI Analog Devices
11.7x8.7%US$111.1b
ARM Arm Holdings
41.1x17.5%US$142.6b

Price-To-Sales vs Peers: ARM is expensive based on its Price-To-Sales Ratio (41.1x) compared to the peer average (8.2x).


Price to Earnings Ratio vs Industry

How does ARM's PE Ratio compare vs other companies in the US Semiconductor Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a26.5%
n/an/an/a
No. of CompaniesPS048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a26.5%
n/an/an/a
No more companies

Price-To-Sales vs Industry: ARM is expensive based on its Price-To-Sales Ratio (41.1x) compared to the US Semiconductor industry average (3.9x).


Price to Sales Ratio vs Fair Ratio

What is ARM's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ARM PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio41.1x
Fair PS Ratio35.7x

Price-To-Sales vs Fair Ratio: ARM is expensive based on its Price-To-Sales Ratio (41.1x) compared to the estimated Fair Price-To-Sales Ratio (35.7x).


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst ARM forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$137.03
US$135.90
-0.8%
27.3%US$200.00US$66.00n/a28
Sep ’25US$132.88
US$134.86
+1.5%
27.9%US$200.00US$66.00n/a27
Aug ’25US$121.51
US$133.81
+10.1%
27.9%US$200.00US$66.00n/a26
Jul ’25US$158.83
US$121.86
-23.3%
28.4%US$200.00US$65.00n/a28
Jun ’25US$120.52
US$111.77
-7.3%
26.1%US$180.00US$55.40n/a29
May ’25US$95.29
US$110.45
+15.9%
28.6%US$180.00US$55.40n/a29
Apr ’25US$126.91
US$103.54
-18.4%
27.2%US$180.00US$55.40n/a28
Mar ’25US$141.62
US$99.11
-30.0%
26.6%US$180.00US$45.00n/a29
Feb ’25US$70.52
US$69.92
-0.8%
23.5%US$110.00US$34.00n/a27
Jan ’25US$75.15
US$65.39
-13.0%
20.9%US$110.00US$34.00n/a28
Dec ’24US$63.90
US$61.53
-3.7%
15.4%US$85.00US$34.00n/a27
Nov ’24US$50.52
US$61.10
+20.9%
15.2%US$85.00US$34.00n/a26
Oct ’24US$53.52
US$50.81
-5.1%
9.8%US$59.00US$46.00US$136.084

Analyst Forecast: Target price is lower than the current share price.


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