ARM (NASDAQ:ARM) Stock Price Up 4% - Time to Buy?

Arm Holdings plc (NASDAQ:ARM) saw a notable increase of 4% in its stock price during mid-day trading on a recent Monday. The stock reached a high of $148.70 and concluded the day at $146.68. A total of approximately 2,803,899 shares exchanged hands, representing a decrease of 37% compared to the average daily trading volume of 4,473,151 shares. The stock had closed at $141.08 prior to this gain.

Wall Street Analyst Perspectives

ARM's stock has been the subject of various recent analyst reports, raising the question: is it time to buy the dip or wait for a better purchase opportunity?

Sanford C. Bernstein downgraded ARM from a 'market perform' rating to 'underperform,' establishing a target price of $100.00 for the stock in a research note dated October 31. Conversely, Susquehanna raised their target price on ARM from $115.00 to $118.00, maintaining a 'neutral' rating in their report on November 7. Benchmark initiated coverage of ARM on September 16, providing a 'hold' rating. William Blair also began coverage on ARM, assigning it an 'outperform' rating on September 18.

Further, Barclays increased their price target on ARM from $125.00 to $145.00 and recommended an 'overweight' rating, as documented in their report from November 7. In summary, two analysts have given the stock a sell rating, six have issued hold ratings, eighteen have rated it as a buy, and one has even given a strong buy rating. According to data from MarketBeat, the average rating for the company stands at 'Moderate Buy,' with a consensus price target of $150.32.

Recent Stock Performance

The stock has gained 5.7% recently, raising interest in ARM's future and making analysts analyze its potential in growing markets, particularly fueled by the AI boom.

With a market capitalization of $156.33 billion, ARM boasts a P/E ratio of 248.65, a PEG ratio of 7.15, and a beta of 4.53. The 50-day moving average price for the stock is $137.80, while the 200-day moving average price stands at $142.28.

ARM reported its quarterly earnings on November 6, revealing earnings of $0.30 per share, surpassing the consensus estimate of $0.26 by $0.04. The firm generated revenue of $844 million for the quarter, exceeding analyst expectations of $810.03 million. ARM's return on equity was recorded at 13.69%, and the net margin was quite healthy at 18.13%. Year-on-year, revenue increased by 4.7%, although the earnings per share from the same period last year was slightly better at $0.36. Analysts predict ARM will report earnings of $0.79 per share for the current fiscal year.

Institutional Ownership Trends

Recent activities among institutional investors further reflect interest in ARM. For instance, KP Management LLC ramped up its holdings in ARM by 28.6% in the third quarter, now owning 45,000 shares valued at about $6,435,000, following a purchase of another 10,000 shares. Additionally, Modus Advisors LLC increased their stake by a massive 300.2% sometime during the fourth quarter, holding 17,935 shares valued at $2,212,000 after acquiring an extra 13,453 shares in the last quarter.

Other notable increases in ownership include XTX Topco Ltd, which grew their shareholding by 150.1% in the third quarter, currently owning 6,486 shares valued at $928,000. Willner & Heller LLC also raised their stake by 193.7% in the third quarter, now holding 6,799 shares priced at $972,000 following an acquisition of 4,484 shares during the same period. Lastly, Avalon Global Asset Management LLC entered a new stake in ARM valued at $8,581,000. At present, institutional investors and hedge funds hold approximately 7.53% of ARM’s stock.

About ARM Holdings

ARM Holdings plc is engaged in the architecture, development, and licensing of central processing unit products along with associated technologies tailored for semiconductor firms and original equipment manufacturers. The company’s product offerings include microprocessors, graphics processing units, and the necessary software tools, systems IPs, as well as other related services.

Investment Insights

With ARM currently rated as a 'Moderate Buy' according to analysts, it raises questions for potential investors regarding whether now is a good time to invest in the stock considering its recent performance and future potential. While some analysts suggest seeking alternative stocks, ARM’s strong fundamentals and recent gains are worth noting.

Overall, for those looking at investment strategies, it could be prudent to monitor ARM for further developments, especially in light of trends in the semiconductor and tech markets.

ARM, Stock, Investment