ARM (ARM) vs. Its Rivals Financial Analysis

ARM (NASDAQ:ARM) is one of 174 public companies in the “Semiconductors & related devices” industry, but how does it contrast to its rivals? We will compare ARM to similar companies based on the strength of its analyst recommendations, earnings, profitability, institutional ownership, risk, valuation and dividends.

Volatility & Risk

ARM has a beta of 5.4, indicating that its stock price is 440% more volatile than the S&P 500. Comparatively, ARM’s rivals have a beta of 1.72, indicating that their average stock price is 72% more volatile than the S&P 500.

Profitability

This table compares ARM and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARM	18.13%	13.69%	9.70%
ARM Competitors	-155.43%	-43.75%	-7.33%

Earnings & Valuation

This table compares ARM and its rivals gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
ARM	$3.23 billion	$306.00 million	225.15
ARM Competitors	$20.59 billion	$805.98 million	16.10

ARM’s rivals have higher revenue and earnings than ARM. ARM is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Institutional & Insider Ownership

7.5% of ARM shares are owned by institutional investors. Comparatively, 56.8% of shares of all “Semiconductors & related devices” companies are owned by institutional investors. 10.6% of shares of all “Semiconductors & related devices” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and price targets for ARM and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARM	2	6	17	1	2.65
ARM Competitors	2521	9828	19276	681	2.56

ARM currently has a consensus price target of $147.95, suggesting a potential upside of 9.52%. As a group, “Semiconductors & related devices” companies have a potential upside of 720.12%. Given ARM’s rivals higher possible upside, analysts clearly believe ARM has less favorable growth aspects than its rivals.

Summary

ARM beats its rivals on 8 of the 13 factors compared.

ARM Company Profile

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. It offers microprocessors, systems intellectual property (IPs), graphics processing units, physical IP and associated systems IPs, software, tools, and other related services. Its products are used in various markets, such as automotive, computing infrastructure, consumer technologies, and Internet of things. The company operates in the United States, the People's Republic of China, Taiwan, South Korea, and internationally. The company was founded in 1990 and is headquartered in Cambridge, the United Kingdom. Arm Holdings plc operates as a subsidiary of Kronos II LLC.