Arm Holdings Plc /Uk (NASDAQ: ARM)

Sector: Technology Industry: Semiconductors CIK: 0001973239
Market Cap 121.89 Bn
P/B 16.46
P/E 146.86
P/S 27.63
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

Price action

Investment thesis

Bull case

  • 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.

Bear case

  • 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.

Geographical Breakdown of Revenue (2025)

Product and Service Breakdown of Revenue (2025)

Peer comparison

Companies in the Semiconductors
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NVDA Nvidia Corp 4,521.08 Bn 45.58 24.16 10.48 Bn
2 TSM Taiwan Semiconductor Manufacturing Co Ltd 1,648.98 Bn 31.97 13.84 31.18 Bn
3 AVGO Broadcom Inc. 1,565.97 Bn 67.71 24.51 65.14 Bn
4 MU Micron Technology Inc 366.37 Bn 30.76 8.66 12.43 Bn
5 AMD Advanced Micro Devices Inc 333.34 Bn 100.83 10.41 3.87 Bn
6 INTC Intel Corp 271.33 Bn 1,370.33 5.08 46.55 Bn
7 QCOM Qualcomm Inc/De 199.55 Bn 36.01 4.51 14.81 Bn
8 TXN Texas Instruments Inc 172.17 Bn 34.14 9.97 14.05 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 12.39 4.13
EV to Cash from Ops. EV/CFO 76.15 -370.81
EV to Debt EV to Debt 293.44 88.27
EV to EBIT EV/EBIT 139.90 -65.23
EV to EBITDA EV/EBITDA 107.23 22.97
EV to Free Cash Flow [EV/FCF] EV/FCF 104.53 -8.14
EV to Market Cap EV to Market Cap 0.99 0.80
EV to Revenue EV/Rev 27.27 20.31
Price to Book Value [P/B] P/B 16.46 5.16
Price to Earnings [P/E] P/E 146.86 9.20
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 2.39
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 8.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.63
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 9.91
Interest Coverage Interest Coverage 0.00 8.38
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -276.32 -155.98
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 68.09 45.60
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 5.64
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 29.49 26.23
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 85.45 47.12
EBIT Growth (1y) % EBIT 1y % (Qtr) 67.97 25.83
EBT Growth (1y) % EBT 1y % (Qtr) 67.97 39.93
EPS Growth (1y) % EPS 1y % (Qtr) 26.23 24.64
FCF Growth (1y) % FCF 1y % (Qtr) 98.79 244.42
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 26.64 43.10
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.45 0.49
Cash Payout Ratio Cash Payout Ratio 0.00 0.09
Cash Ratio Cash Ratio (Qtr) 2.62 2.23
Current Ratio Curr Ratio (Qtr) 5.59 5.43
Debt to Equity Ratio Debt/Equity (Qtr) 0.06 0.34
Interest Cover Ratio Interest Cover Ratio 0.00 8.38
Times Interest Earned Times Interest Earned 0.00 8.38
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 25.40 -112.38
EBIT Margin % EBIT Margin % (Qtr) 19.49 -91.98
EBT Margin % EBT Margin % (Qtr) 19.49 -132.25
Gross Margin % Gross Margin % (Qtr) 97.40 47.73
Net Profit Margin % Net Margin % (Qtr) 18.80 -133.26