Comparing ARM (ARM) and Its Competitors

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

Institutional and Insider Ownership

7.5% of ARM shares are owned by institutional investors. Comparatively, 54.7% of shares of all “Semiconductors & Semiconductor Equipment” companies are owned by institutional investors. 11.8% of shares of all “Semiconductors & Semiconductor Equipment” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARM	1	7	18	0	2.65
ARM Competitors	3512	12384	25831	1004	2.57

ARM presently has a consensus price target of $296.38, indicating a potential upside of 45.74%. As a group, “Semiconductors & Semiconductor Equipment” companies have a potential upside of 35.89%. Given ARM’s stronger consensus rating and higher probable upside, research analysts plainly believe ARM is more favorable than its competitors.

Earnings and Valuation

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

	Gross Revenue	Net Income	Price/Earnings Ratio
ARM	$5.46 billion	$904.00 million	233.75
ARM Competitors	$9.85 billion	$2.53 billion	8.76

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.

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	-1,255.44%	-126.13%	-3.87%

Risk and Volatility

ARM has a beta of 3.93, indicating that its share price is 293% more volatile than the S&P 500. Comparatively, ARM’s competitors have a beta of 2.81, indicating that their average share price is 181% more volatile than the S&P 500.

Summary

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

ARM Company Profile

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.