ARM Relative Valuation
ARM's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, ARM is overvalued; if below, it's undervalued.
Historical Valuation
Arm Holdings PLC (ARM) is now in the Fair zone, suggesting that its current forward PE ratio of 71.76 is considered Fairly compared with the five-year average of 75.46. The fair price of Arm Holdings PLC (ARM) is between 115.44 to 163.18 according to relative valuation methord.
Relative Value
Fair Zone
115.44-163.18
Current Price：140.49
Fair
72.43
PE
1Y
3Y
5Y
Trailing
Forward
56.28
EV/EBITDA
Arm Holdings PLC. (ARM) has a current EV/EBITDA of 56.28. The 5-year average EV/EBITDA is 60.48. The thresholds are as follows: Strongly Undervalued below 35.24, Undervalued between 35.24 and 47.86, Fairly Valued between 73.09 and 47.86, Overvalued between 73.09 and 85.71, and Strongly Overvalued above 85.71. The current Forward EV/EBITDA of 56.28 falls within the Historic Trend Line -Fairly Valued range.
62.75
EV/EBIT
Arm Holdings PLC. (ARM) has a current EV/EBIT of 62.75. The 5-year average EV/EBIT is 65.93. The thresholds are as follows: Strongly Undervalued below 39.34, Undervalued between 39.34 and 52.63, Fairly Valued between 79.22 and 52.63, Overvalued between 79.22 and 92.51, and Strongly Overvalued above 92.51. The current Forward EV/EBIT of 62.75 falls within the Historic Trend Line -Fairly Valued range.
27.62
PS
Arm Holdings PLC. (ARM) has a current PS of 27.62. The 5-year average PS is 29.86. The thresholds are as follows: Strongly Undervalued below 16.06, Undervalued between 16.06 and 22.96, Fairly Valued between 36.75 and 22.96, Overvalued between 36.75 and 43.65, and Strongly Overvalued above 43.65. The current Forward PS of 27.62 falls within the Historic Trend Line -Fairly Valued range.
71.46
P/OCF
Arm Holdings PLC. (ARM) has a current P/OCF of 71.46. The 5-year average P/OCF is 81.87. The thresholds are as follows: Strongly Undervalued below 36.79, Undervalued between 36.79 and 59.33, Fairly Valued between 104.42 and 59.33, Overvalued between 104.42 and 126.96, and Strongly Overvalued above 126.96. The current Forward P/OCF of 71.46 falls within the Historic Trend Line -Fairly Valued range.
90.26
P/FCF
Arm Holdings PLC. (ARM) has a current P/FCF of 90.26. The 5-year average P/FCF is 89.60. The thresholds are as follows: Strongly Undervalued below 39.09, Undervalued between 39.09 and 64.34, Fairly Valued between 114.85 and 64.34, Overvalued between 114.85 and 140.11, and Strongly Overvalued above 140.11. The current Forward P/FCF of 90.26 falls within the Historic Trend Line -Fairly Valued range.
Arm Holdings PLC (ARM) has a current Price-to-Book (P/B) ratio of 19.94. Compared to its 3-year average P/B ratio of 21.73 , the current P/B ratio is approximately -8.25% higher. Relative to its 5-year average P/B ratio of 21.73, the current P/B ratio is about -8.25% higher. Arm Holdings PLC (ARM) has a Forward Free Cash Flow (FCF) yield of approximately 0.00%. Compared to its 3-year average FCF yield of 0.69%, the current FCF yield is approximately -100.00% lower. Relative to its 5-year average FCF yield of 0.69% , the current FCF yield is about -100.00% lower.
20.12
P/B
Median3y
21.73
Median5y
21.73
0.78
FCF Yield
Median3y
0.69
Median5y
0.69
Competitors Valuation Multiple
The average P/S ratio for ARM's competitors is , providing a benchmark for relative valuation. Arm Holdings PLC Corp (ARM) exhibits a P/S ratio of , which is NaN% above the industry average. Given its robust revenue growth of 34.48%, this premium appears sustainable.
P/S
P/E
EV/EBITDA
EV/EBIT
P/S
Revenue Growth
Market Cap
Performance Decomposition
1Y
3Y
5Y
Market capitalization of ARM increased by 13.89% over the past 1 year. The primary factor behind the change was an increase in Margin Expansion from 12.68 to 20.97.
The secondary factor is the Revenue Growth, contributed 34.48%to the performance.
Overall, the performance of ARM in the past 1 year is driven by Margin Expansion. Which is more sustainable.
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FAQ
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