ARM (ARM) vs. Its Rivals Financial Comparison

ARM (NASDAQ:ARM) is one of 170 public companies in the “Semiconductors & related devices” industry, but how does it weigh in compared to its peers? We will compare ARM to similar businesses based on the strength of its institutional ownership, valuation, analyst recommendations, earnings, risk, dividends and profitability.

Profitability

This table compares ARM and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARM	12.12%	18.97%	13.23%
ARM Competitors	-138.79%	-40.81%	-6.44%

Insider and Institutional Ownership

7.5% of ARM shares are held by institutional investors. Comparatively, 56.7% of shares of all “Semiconductors & related devices” companies are held by institutional investors. 10.4% of shares of all “Semiconductors & related devices” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares ARM and its peers revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
ARM	$3.50 billion	$306.00 million	369.86
ARM Competitors	$24.89 billion	$794.29 million	9.76

ARM’s peers have higher revenue and earnings than ARM. ARM is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a summary of recent recommendations for ARM and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARM	1	7	16	2	2.73
ARM Competitors	2463	9642	18877	676	2.56

ARM currently has a consensus price target of $138.57, suggesting a potential downside of 3.50%. As a group, “Semiconductors & related devices” companies have a potential upside of 653.63%. Given ARM’s peers higher possible upside, analysts clearly believe ARM has less favorable growth aspects than its peers.

Summary

ARM beats its peers on 7 of the 12 factors compared.

About ARM

Arm Holdings plc architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers rely on to develop products. It offers microprocessors, systems intellectual property (IPs), graphics processing units, physical IP and associated systems IPs, software, tools, and other related services. Its products are used in various markets, such as automotive, computing infrastructure, consumer technologies, and Internet of things. The company operates in the United States, the People's Republic of China, Taiwan, South Korea, and internationally. The company was founded in 1990 and is headquartered in Cambridge, the United Kingdom. Arm Holdings plc operates as a subsidiary of Kronos II LLC.