ARM (ARM) and Its Rivals Critical Contrast

ARM (NASDAQ:ARM) is one of 220 public companies in the “Semiconductors & Semiconductor Equipment” industry, but how does it contrast to its competitors? We will compare ARM to related companies based on the strength of its risk, valuation, analyst recommendations, profitability, dividends, institutional ownership and earnings.

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	17.13%	11.57%	8.99%
ARM Competitors	-1,256.62%	-126.00%	-4.18%

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARM	1	7	18	0	2.65
ARM Competitors	3520	12407	25867	1005	2.57

ARM presently has a consensus price target of $296.38, indicating a potential upside of 55.55%. As a group, “Semiconductors & Semiconductor Equipment” companies have a potential upside of 41.16%. Given ARM’s stronger consensus rating and higher probable upside, equities analysts plainly believe ARM is more favorable than its competitors.

Insider & Institutional Ownership

7.5% of ARM shares are held by institutional investors. Comparatively, 54.7% of shares of all “Semiconductors & Semiconductor Equipment” companies are held by institutional investors. 11.8% of shares of all “Semiconductors & Semiconductor Equipment” companies are held by company 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 competitors revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
ARM	$4.92 billion	$904.00 million	219.00
ARM Competitors	$39.12 billion	$2.53 billion	17.48

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.

Volatility & Risk

ARM has a beta of 3.93, suggesting that its stock price is 293% more volatile than the S&P 500. Comparatively, ARM’s competitors have a beta of 2.80, suggesting that their average stock price is 180% more volatile than the S&P 500.

Summary

ARM beats its competitors on 8 of the 13 factors compared.

About ARM

Arm Holdings plc designs and licenses semiconductor technology, including processor architectures and related intellectual property. Rather than manufacturing chips, the company licenses its designs and collects royalties on products that use them. Arm’s offerings include Cortex CPUs, Mali graphics processors, Neoverse infrastructure platforms and other technology for applications ranging from smartphones and consumer electronics to automotive systems, the Internet of Things and cloud computing.