Back to top


ARM Holdings Plc (ARMH)

Company Description
You may recognize the name from their ARM chips (processors) that come in all sorts of electronics ranging from mobile handsets, Smartphones and digital set top boxes to car braking systems, network routers and more.  In fact over 20 billion ARM based have shipped to date and over 800 processor licenses have been sold in more than 250 countries since ARM was formed in 1990.

ARMH is focused more in the design and licensing of IP, as opposed to the manufacture of the products themselves.  This structure allows them to collect royalties on every ARM based product produced and keeps them focused on development of products and services as well as forming partnerships to keep their products flowing into new technologies.

They are doing something right; ARM technology is used in 90% of smart phones, 80% of digital cameras, and 28% of all electronic devices globally and yes, their chips are found in iPhones.

The stock can be rather volatile and only recently has it begun to build bullish momentum.  With a P/E of 56, they will need to continue to deliver strong earnings results.

Recent Developments
Processors aren’t their only business; The British Tech Company just announced a joint venture with two European technology companies to develop a new security standard for online transactions for Smartphones, tablets, game consoles and more. Their key is low power consumption, small size and fast processing.

Now that ARM processors can run Microsoft Windows, the PC market could be another huge catalyst for the company.  The company expects 100 billion processors to be shipped by 2020.

Financial Profile & Earnings
ARMH is a mid-cap (13.06 billion) company that is trading at about 56 times forward (expectations for next quarter) earnings. ARMH became a Zacks Rank 1 strong buy on April 3rd.

The chip designer saw annual sales increase 23%, which drove an earnings increase from $0.30 in FY2010 to $0.38 in FY2011 (diluted). 

ARM has surprised analysts to the upside 3 quarters in a row with a miss back in March of 2011 at an average of almost +11.37% surprise per report over the past year.  Of the 7 analysts who cover ARMH, the consensus is for the company to grow earnings by 22% in the current year (FY2012) and roughly 20% in FY2013.  According to the Zacks Consensus Estimate, expectations are for ARMH to earn 11 cents when they report results on April 25th.

The stock is currently trading arond $29 a share, look for support around the $27.50 area, which is where the 50 and 200 day moving averages are converging.  

Jared A Levy is the Momentum Stock Strategist for He is also the Editor in charge of the market-beating Zacks Whisper Trader Service.


Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
PLANAR SYST… PLNR 4.44 +5.21%
BITAUTO HOL… BITA 81.71 +5.12%
CTPARTNERS… CTP 16.66 +4.26%
CHINA BIOLO… CBPO 47.91 +3.30%
MALLINCKROD… MNK 72.94 +2.85%