Head-To-Head Analysis: ARM (ARM) vs. Its Competitors

ARM (NASDAQ:ARM) is one of 174 public companies in the “Semiconductors & related devices” industry, but how does it compare to its competitors? We will compare ARM to related companies based on the strength of its analyst recommendations, dividends, institutional ownership, valuation, risk, profitability and earnings.

Volatility & Risk

ARM has a beta of 5.4, meaning that its stock price is 440% more volatile than the S&P 500. Comparatively, ARM’s competitors have a beta of 1.72, meaning that their average stock price is 72% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for ARM and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARM	2	6	16	2	2.69
ARM Competitors	2501	9775	19188	681	2.56

ARM currently has a consensus target price of $138.57, suggesting a potential upside of 0.76%. As a group, “Semiconductors & related devices” companies have a potential upside of 689.64%. Given ARM’s competitors higher possible upside, analysts clearly believe ARM has less favorable growth aspects than its competitors.

Institutional & Insider Ownership

7.5% of ARM shares are owned by institutional investors. Comparatively, 56.8% of shares of all “Semiconductors & related devices” companies are owned by institutional investors. 9.9% of shares of all “Semiconductors & related devices” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares ARM and its competitors’ 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	-156.23%	-41.29%	-6.94%

Valuation and Earnings

This table compares ARM and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
ARM	$3.23 billion	$306.00 million	356.96
ARM Competitors	$4.02 billion	$806.07 million	18.47

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

Summary

ARM beats its competitors on 8 of the 13 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.