Contrasting ARM (ARM) & Its Competitors

ARM (NASDAQ:ARM) is among 174 publicly listed companies in the semiconductors and related devices sector. This article examines how ARM stands out from its competitors by comparing various aspects including earnings strength, valuation, analyst recommendations, institutional ownership, profitability, dividends, and risk.

Risk & Volatility

ARM carries a beta of 5.4, which suggests its share price is 440% more volatile compared to the S&P 500 index. In contrast, the average beta for ARM's competitors stands at 1.72, indicating their share prices are 72% more volatile than the S&P 500.

Insider & Institutional Ownership

Institutional investors own 7.5% of ARM shares. Comparatively, across the semiconductor industry, institutional investors hold 56.8% of shares. Additionally, insider ownership across the industry averages 9.8%. High institutional ownership usually signals confidence among large investors regarding a company’s potential for long-term growth.

Valuation & Earnings

The following table illustrates the gross revenue, net income, and price-to-earnings (P/E) ratio of ARM alongside its competitors:

	Gross Revenue	Net Income	Price/Earnings Ratio
ARM	$3.23 billion	$306.00 million	386.29
ARM Competitors	$5.68 billion	$806.07 million	19.65

ARM’s competitors exhibit higher revenue and net earnings relative to ARM. Additionally, ARM's significantly higher P/E ratio implies that it is currently valued more expensively compared to other firms in the sector.

Profitability

The following table showcases the net margins, return on equity (ROE), and return on assets (ROA) for ARM and its competitors:

	Net Margins	Return on Equity	Return on Assets
ARM	12.12%	18.97%	13.23%
ARM Competitors	-156.57%	-41.39%	-7.00%

Analyst Recommendations

The following summary represents recent recommendations for ARM and its competitors as compiled by MarketBeat:

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARM	2	6	17	1	2.65
ARM Competitors	2511	9800	19232	681	2.56

Currently, ARM has a consensus target price of $145.57, which indicates a potential downside of 3.37%. Meanwhile, the semiconductor industry generally has a potential upside of 653.12%. Analysts suggest that, based on this data, ARM has less favorable growth potential compared to its competitors.

Summary

In total, ARM excels in 8 out of the 13 factors compared with its competitors.

About ARM

Arm Holdings plc specializes in the design, development, and licensing of central processing unit products and technologies that semiconductor companies and original equipment manufacturers utilize to create their products. ARM’s offerings include microprocessors, systems intellectual property, graphics processing units, and associated software and tools. Its products find applications in diverse markets such as automotive, computing infrastructure, consumer technology, and the Internet of Things. Founded in 1990, ARM is headquartered in Cambridge, United Kingdom, and operates internationally, including in the United States and China.

ARM, Competitors, Earnings, Valuation, Profitability, Risk, Investment