Arm Holdings Plc /Uk (NASDAQ: ARM)

Sector: Technology Industry: Semiconductors CIK: 0001973239
P/B 19.05
P/E 169.99
P/S 31.98
Market Cap 141.09 Bn
ROIC (Qtr) 8.94
Div Yield % 0.00
Rev 1y % (Qtr) 34.48
Total Debt (Qtr) 410.00 Mn
Debt/Equity (Qtr) 0.06

About

Stock Price Chart

Analysis

Pros

  • Strong operating cash flow of 1.58B provides robust 3.85x coverage of total debt 410M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 2.52B provide 68.05x coverage of short-term debt 37M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 7.84B provides 19.12x coverage of total debt 410M, indicating robust asset backing and low credit risk.
  • Strong operating cash flow of 1.58B provides 1.56x coverage of SG&A expenses 1.01B, showing efficient operational cost management.
  • Robust free cash flow of 1.15B exceeds capital expenditure of 429M by 2.68x, indicating strong organic growth funding capability.

Cons

  • Operating cash flow of 1.58B barely covers its investment activities of (212M), with a coverage ratio of -7.45, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (212M) provide weak support for R&D spending of 2.42B, which is -0.09x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of 1.58B shows concerning coverage of stock compensation expenses of 926M, with a 1.71 ratio indicating potential earnings quality issues.
  • Tangible assets of 7.84B provide limited backing for working capital of 4.41B, which is 1.78x, suggesting increased operational risk in market downturns.
  • Fixed assets of 1.01B showing 3.90x ratio to depreciation of 260M indicates aging infrastructure requiring significant near-term capital investment.

Peer Comparison

Companies in the Semiconductors
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NVDA Nvidia Corp 4,276.26 Bn 43.11 22.85 10.48 Bn
2 AVGO Broadcom Inc. 1,690.87 Bn 89.31 28.22 64.23 Bn
3 TSM Taiwan Semiconductor Manufacturing Co Ltd 1,514.32 Bn 29.36 12.71 31.18 Bn
4 AMD Advanced Micro Devices Inc 343.27 Bn 103.83 10.72 3.87 Bn
5 MU Micron Technology Inc 269.16 Bn 31.52 7.20 15.28 Bn
6 INTC Intel Corp 249.55 Bn 1,260.33 4.67 46.55 Bn
7 QCOM Qualcomm Inc/De 195.62 Bn 35.30 4.42 14.81 Bn
8 TXN Texas Instruments Inc 163.92 Bn 32.50 9.49 14.05 Bn

Industry Comparisons

Current Valuation

Metric Value Industry Percentile
EV to Assets 14.37 3.95
EV to Cash from Ops. 88.30 -331.60
EV to Debt 340.26 86.14
EV to EBIT 162.22 -55.96
EV to EBITDA 124.34 20.88
EV to Free Cash Flow [EV/FCF] 121.21 -4.09
EV to Market Cap 0.99 0.80
EV to Revenue 31.62 18.79
Price to Book Value [P/B] 19.05 5.23
Price to Earnings [P/E] 169.99 12.47

Dividend Metrics

Metric Value Industry Percentile
Dividend Coverage Ratio 0.00 2.29
Dividend Payout Ratio % 0.00 8.00
Dividend per Basic Share 0.00 0.62
FCF Dividend Payout Ratio % 0.00 10.38
Interest Coverage 0.00 8.19

Growth Metrics

Metric Value Industry Percentile
Capex Growth (1y) % -276.32 -155.77
Cash and Equivalents Growth (1y) % 68.09 44.44
Dividend Growth (1y) % 0.00 5.30
EBIAT Growth (1y) % 29.49 34.22
EBITDA Growth (1y) % 85.45 47.50
EBIT Growth (1y) % 67.97 30.14
EBT Growth (1y) % 67.97 47.04
EPS Growth (1y) % 26.23 36.18
FCF Growth (1y) % 98.79 252.76
Gross Profit Growth (1y) % 26.64 43.92

Liquidity Ratios

Metric Value Industry Percentile
Asset Utilization Ratio 0.45 0.49
Cash Payout Ratio 0.00 0.09
Cash Ratio 2.62 2.23
Current Ratio 5.59 5.43
Debt to Equity Ratio 0.06 0.34
Interest Cover Ratio 0.00 8.19
Times Interest Earned 0.00 8.19

Profitability

Metric Value Industry Percentile
EBITDA Margin % 25.40 -112.44
EBIT Margin % 19.49 -92.10
EBT Margin % 19.49 -132.39
Gross Margin % 97.40 47.63
Net Profit Margin % 18.80 -133.41