From Morningstar: 2024-05-10 05:25:00

Arm Holdings reported earnings after the market close on May 8, with a fair value estimate of $57, a Morningstar rating of 1 star, a wide economic moat rating, and a high uncertainty rating. Despite a 35% decline in shares since February, Arm still trades at a 40% premium compared to peers.

The wide-moat company’s fourth-quarter results exceeded FactSet consensus, with $928 million in revenue and $0.36 adjusted EPS. However, the stock fell 9% in aftermarket trading as investors were unimpressed with the 2025 growth projections of 22%. Arm v9 continues to gain market share, expected to represent 60-70% of revenue in two-to-three years, with growth driven by cloud and automotive sectors due to energy efficiency. Arm’s free float remains low at around 10% leading to continued share price volatility.



Read more at Morningstar: Arm Earnings: Investors Disappointed by Guidance