Very little debt to repay and plenty of cash on hand, so it is hard to shake.
Metrics · D/E ~6% · Current Ratio 6.00
💲Is the price expensive now?
On the expensive side
Even accounting for growth expectations, the price is set high.
Metrics · P/E 394.9 · P/B 42.9
💡IP licensor whose CPU designs set the smartphone standard: 94% gross margin, near-zero debt. Profits stay small (18% margin, 12% ROE); 395x P/E is extreme.
Compiled from public financial data. Not a recommendation to buy or sell any security. · Source: TradingView (margins, debt, liquidity, P/B are TTM), as of 2026-06-28
Business Summary · Key Value Metrics
A semiconductor IP company that designs and licenses the CPU instruction set (ISA) and cores that are the de facto standard in smartphones. It doesn't make chips itself, earning license fees for design rights plus a royalty on every chip shipped. Expanding into data centers and AI. TTM revenue $4.9B, 94.1% gross margin, 18.3% operating margin.
Arm is an IP company that licenses the CPU instruction set (ISA) and core designs that are the de facto smartphone standard; most of the world's smartphones are Arm-based. It earns on two tracks — licenses (design-rights fees) and royalties (a fee per chip shipped) — and per-chip royalty rates are rising as customers adopt the v9 architecture and CSS (compute subsystems). TTM gross margin is 94.1% (source: company IR · F-1/20-F).
Ecosystem standard
Most smartphones are Arm-based; toolchain and software ecosystem lock-in.
Intangible assets
Decades of accumulated CPU-architecture patents and design IP.
Cost advantage
A pure IP-licensing model yields a ~94% gross margin.
Royalty leverage
Per-chip royalty rates are rising with v9 and CSS adoption.
10-Year Financial Trends
Arm relisted in September 2023, so public financials start from FY2022 (March year-end). Revenue grew from $2.70B in FY2022 to $4.92B in FY2026 (a 4-year CAGR of +16.2%), as the shift to the v9 architecture and the spread of data-center and AI chips lifted royalties. FY2024 operating margin fell temporarily to 3.4% on large IPO-related stock compensation before recovering to 20.7% in FY2025. Diluted EPS is meaningful only from FY2024, once the public-company structure was in place (source: stockanalysis · company IR).
9-Year CAGR: Revenue +16.2% · Operating Income +9.3% · Net Income +13.3% · EPS +71% (FY24~26)
Sources: stockanalysis · company IR (F-1/20-F) · TradingView. Arm's September 2023 relisting means public financials begin in FY2022 (March year-end), so revenue, operating income, and operating margin span five years, while EPS, P/E, and ROE span three years from FY2024, once the public-company structure was in place. EPS is diluted GAAP. FY2024 operating income and margin dropped temporarily on large IPO-related stock compensation. CAGR is on an FY2022-2026 (4-year) basis.
Mega-Cap Value Metric Comparison
Arm's pure IP-licensing model gives it a ~94% gross margin, far above the peer group, but its GAAP operating margin (18.3%) and ROE (12.0%) trail NVDA (64%/114%) and QCOM (26%/36%). Its TTM P/E of about 395x is the highest in the group, so growth expectations are heavily priced in (all TTM · sources: TradingView · company IR).
Metric
★ ARM
NVDA
QCOM
P/E (TTM)
394.9
29.5
20.6
Operating Margin
18.3%
64.0%
25.7%
ROE
12.0%
114.3%
36.1%
Revenue YoY Growth
+22.8%
+70.7%
+5.2%
P/E, ROE, and operating margin = TTM; revenue growth = TTM YoY · sources: TradingView · company IR, as of 2026-06-28.
Key Risk Factors (from 10-K)
●
Extreme valuation— At a TTM P/E of ~395x and a P/S of ~73x, high future growth is already heavily priced in; a growth slowdown risks a sharp multiple de-rating.Source: TradingView
●
RISC-V threat— Wider adoption of the open-source RISC-V architecture could threaten the long-term licensing model.Source: Industry
●
SoftBank ownership— SoftBank owns about 90%, leaving a small float that limits minority-shareholder influence and adds price volatility.Source: Company 20-F
●
China and customer concentration— China is about 20% of revenue, carrying U.S.-China regulatory risk; the licensing model also leaves room for customers to bring designs in-house.Source: Company 20-F
✦ ValueCrab Dashboard PreviewARM $334.27 -3.87% · as of 2026-06-28
Q. What are Arm's (ARM) key value-investing metrics?P/E (TTM) 394.9, gross margin 94.1%, operating margin 18.3% (GAAP), ROE 12.0%, TTM revenue +22.8%, and revenue CAGR +16.2% (FY22-26) (sources: TradingView · stockanalysis, as of 2026-06-28).
Q. How does Arm make money?Arm doesn't make chips; it licenses out CPU designs (IP). Revenue comes on two tracks: a license fee when it grants rights to a new design, and a royalty each time a chip built on that design is sold. Because most smartphones are Arm-based, royalties grow as shipments rise.
Q. What is the analyst price-target consensus for Arm?The average target across 43 analysts is $300.77. This is an external consensus, not our own estimate; it sits about -10.0% below the current $334.27, meaning the average target is lower than the current price. Source: TradingView, 2026-06.
Q. Why is the P/E as high as 395x?Expectations of high future growth — expansion into AI and data centers and rising v9 royalty rates — are heavily reflected in the current price. A still-small GAAP earnings base so soon after relisting also lifts the P/E. We do not offer a definitive buy or sell view.