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Arm Holdings plc

Rank #117HypergrowthWatchlistCompare with other stocks

ARM · Nasdaq · Technology

Arm Holdings plc (ARM) — Rank #117 by gross profitability (GP/assets 0.43) · ROE 10.5% · Piotroski F-Score 6 / 9.

As-of 2026-10-30 · CIK 0001973239 · all metrics point-in-time as of the filing date.

About

Arm Holdings plc researches, develops, licenses, and markets central processing unit (CPU) intellectual property (IP), graphics processing unit IP, systems IP, compute subsystems (CSS), and associated software, tools and related services.

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The company provides a product portfolio, including CPU IP, GPU and neural processing unit (NPU) accelerators, system IP such as interconnects, compute platform products including pre-integrated CSSs, and development tools and software. The company serves semiconductor companies, original equipment manufacturers (OEMs), cloud service providers (CSPs), and organizations developing chips for end markets such as smartphones, consumer electronics, industrial IoT, embedded systems, cloud data centers, networking, automotive, and robotics. It provides its products and services in the United States, China, Japan, Taiwan, Korea, and internationally.

The company was founded in 1990 and is based in Cambridge, United Kingdom. Arm Holdings plc operates as a subsidiary of SoftBank Group Corp.

Industry
Semiconductors
Sector
Technology
State
X0
Filer Category
Large accelerated filer
Fiscal Year End
March 31
Website
arm.com

Company Snapshot

P/S is the primary valuation lens — earnings are reinvested, not available for P/E.

Market Cap

—

P/E (annual)

—

P/S (annual)

—

P/B

—

P/OCF (annual)

—

Shareholder Yield

—

Employees

9,584

Industry

Semiconductors

Exchange

Nasdaq

11/12

Flags passed

ARM fails 1 critical flag

Passes 11 of 12 quality flags

  • FAIL
    Operating margin declining

    Operating margin lower than prior year

  • PASS
    Gross margin holding
  • PASS
    Dilution within 2%
  • PASS
    FCF not negative from investment
  • PASS
    Disclosure consistent
  • PASS
    Revenue not declining
  • PASS
    Free cash flow intact
  • PASS
    Passes safety gate
  • PASS
    Balance sheet stable
  • PASS
    No competitive retreat
  • PASS
    SBC not compressing margin
  • PASS
    No valuation convergence

Strengths Deferred revenue growing · Sequential beat (rev + EPS)

A count of the 12 warning flags that could be evaluated. Unweighted: colour follows the worst flag.

Quality Profile

Profitability

1/1 pass
GP / assets
0.43
Return on equity
10.5%
Gross margin trend
PASS

Safety

1/1 pass
Balance-sheet safety
PASS
Debt / equity
0.30
Current ratio
5.25×
Net cash
$4.48B

Cash Flow

3/3 pass
Positive FCF
PASS
Cash-backed earnings
PASS
Accruals healthy
PASS
SBC / revenue
21.4%

Growth

2/2 pass
Revenue growth
22.8%
Piotroski F-Score
6 / 9
Share dilution
0.5%

Revenue growth and the path to profitability (margin trend) are the primary reads at this stage.

Profitability

Does it make money well?

Warning: Operating margin declining · GP/assets 90th percentile of 21 SIC 3674 peers

Gross profitability (GP / assets)

0.43

Primary signal (Novy-Marx).

90th pctl of 21 SIC 3674 peers

Return on equity

10.5%

Gross margin

97.5%

100th pctl of 21 SIC 3674 peers

Revenue growth (YoY)

22.8%

RPO growth (YoY)

-6.9%

Remaining performance obligations growth — RPO > revenue = forward demand building.

Gross margin improving

Margin trend vs prior year.

PASS

Operating Leverage

2023202420252026
Revenue vs COGS
Revenue vs OpEx
Op. Income vs Revenue

Growth

Revenue CAGR (3Y)

22.5%

Revenue CAGR (5Y)

—

Earnings CAGR (3Y)

19.9%

FCF CAGR (3Y)

—

Cash Flow Health

Is the cash real?

No warning flags · FCF 8% above net income

Free cash flow

$979.00M

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF vs net income

8.3%

(FCF − net income) ÷ |net income|. Positive: cash above earnings. Negative: below.

FCF not below net income

Fails when free cash flow is below net income (yellow flag).

PASS

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

21.4%

Stock-based comp intensity.

Balance Sheet Strength

Can it survive a storm?

No warning flags · net cash $4.48B, F-Score 6/9

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

0.30

68th pctl of 20 SIC 3674 peers (best = lowest)

Current ratio

5.25×

75th pctl of 21 SIC 3674 peers

Quick ratio

4.15×

Net cash

$4.48B

Cash & equivalents minus total debt.

Piotroski F-Score

6 / 9

Fundamental-strength score (0-9).

Valuation

Is the price reasonable?

No warning flags

Capital allocation quality

Composite score

3.3 / 5

Good
Share count trend
0.5%2/5 Fair
Buyback timing
N/AN/A
Dividend growth consistency(non-payer or broken streak)
0 yr3/5 Good
Net debt trajectory(deleveraging)
5.6%5/5 Strong

Lifecycle Phase History

20222026
Hypergrowth

Price History

ARM+333.4% · +62.7% CAGRSPY+76.0% · +20.6% CAGR

View full financial statements →

Source filings on SEC EDGAR: 10-K annual reports · 10-Q quarterly reports