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 72.44 is considered Fairly compared with the five-year average of 75.69. The fair price of Arm Holdings PLC (ARM) is between 111.98 to 160.10 according to relative valuation methord.
Relative Value
Fair Zone
111.98-160.10
Current Price：140.26
Fair
72.44
PE
1Y
3Y
5Y
Trailing
Forward
56.33
EV/EBITDA
Arm Holdings PLC. (ARM) has a current EV/EBITDA of 56.33. The 5-year average EV/EBITDA is 60.35. The thresholds are as follows: Strongly Undervalued below 34.46, Undervalued between 34.46 and 47.40, Fairly Valued between 73.30 and 47.40, Overvalued between 73.30 and 86.24, and Strongly Overvalued above 86.24. The current Forward EV/EBITDA of 56.33 falls within the Historic Trend Line -Fairly Valued range.
62.80
EV/EBIT
Arm Holdings PLC. (ARM) has a current EV/EBIT of 62.80. The 5-year average EV/EBIT is 65.69. The thresholds are as follows: Strongly Undervalued below 38.47, Undervalued between 38.47 and 52.08, Fairly Valued between 79.29 and 52.08, Overvalued between 79.29 and 92.90, and Strongly Overvalued above 92.90. The current Forward EV/EBIT of 62.80 falls within the Historic Trend Line -Fairly Valued range.
140.26
PS
Arm Holdings PLC. (ARM) has a current PS of 140.26. The 5-year average PS is 33.44. The thresholds are as follows: Strongly Undervalued below -11.30, Undervalued between -11.30 and 11.07, Fairly Valued between 55.82 and 11.07, Overvalued between 55.82 and 78.19, and Strongly Overvalued above 78.19. The current Forward PS of 140.26 falls within the Strongly Overvalued range.
67.92
P/OCF
Arm Holdings PLC. (ARM) has a current P/OCF of 67.92. The 5-year average P/OCF is 82.04. The thresholds are as follows: Strongly Undervalued below 35.54, Undervalued between 35.54 and 58.79, Fairly Valued between 105.29 and 58.79, Overvalued between 105.29 and 128.54, and Strongly Overvalued above 128.54. The current Forward P/OCF of 67.92 falls within the Historic Trend Line -Fairly Valued range.
80.97
P/FCF
Arm Holdings PLC. (ARM) has a current P/FCF of 80.97. The 5-year average P/FCF is 88.22. The thresholds are as follows: Strongly Undervalued below 36.21, Undervalued between 36.21 and 62.21, Fairly Valued between 114.22 and 62.21, Overvalued between 114.22 and 140.22, and Strongly Overvalued above 140.22. The current Forward P/FCF of 80.97 falls within the Historic Trend Line -Fairly Valued range.
Arm Holdings PLC (ARM) has a current Price-to-Book (P/B) ratio of 20.09. Compared to its 3-year average P/B ratio of 21.82 , the current P/B ratio is approximately -7.92% higher. Relative to its 5-year average P/B ratio of 21.82, the current P/B ratio is about -7.92% 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 0.68%, the current FCF yield is approximately -100.00% lower. Relative to its 5-year average FCF yield of 0.68% , the current FCF yield is about -100.00% lower.
20.09
P/B
Median3y
21.82
Median5y
21.82
0.78
FCF Yield
Median3y
0.68
Median5y
0.68
Competitors Valuation Multiple
The average P/S ratio for ARM's competitors is 307.84, providing a benchmark for relative valuation. Arm Holdings PLC Corp (ARM) exhibits a P/S ratio of 140.26, which is -54.44% 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 4.45% 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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