| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 5 | 270.2x | 17.8x | Bottom tier | |
Growth | 89 | 25.1% | 7.1% | Top tier | |
Quality | 87 | 7.9% | 4.5% | Top tier | |
Safety | 90 | — | 2.6x | Top tier | |
Capital Return | 51 | — | 2.12% | Around median | |
Momentum | 78 | 92.5% | 2.9% | Top tier | |
Sentiment | 53 | 21 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Arm develops a computing platform used across cloud infrastructure, data centers, personal computers, phones, vehicles, robotics, and industrial systems. Its core model relies on revenue from licensing architectures and intellectual property to customers, followed by royalties as products built on its technologies are shipped; it has also begun expanding its model toward selling silicon through Arm AGI CPU, with its future revenue remaining separate from licensing and royalties once it reaches 10% of revenue.
In the first quarter of fiscal year 2027, Arm reported record first-quarter revenue of $1.29 billion, up 22% year over year and exceeding analysts' estimates of $1.26 billion. Royalty revenue was $715 million, or about 55% of the total, up 22%, while licensing and other revenue was $574 million, or about 45%, up 23%; of this amount, the SoftBank licensing and design services agreement contributed about $193 million.
According to EDGAR filings, net income was $270 million and earnings per share were $0.25 in the first quarter of fiscal year 2027, equivalent to a net margin of approximately 21% based on revenue of $1.29 billion. Adjusted results showed earnings per share of $0.45, up 29%, operating income of $531 million, and an operating margin of approximately 41%, up 200 basis points, while free cash flow was $665 million during the quarter and $1.4 billion during the trailing twelve months.
The analyst consensus is “Buy,” with an average price target of $366.75, a high target of $641, and a low target of $210; the average is about 19% below the 52-week range high of $452.70, while the wide target range reveals substantial disagreement over the value of the AI opportunity. A July 29, 2026 report cited a forward price-to-earnings multiple of 113 times, tying the valuation to exceptional growth in Neoverse and Arm AGI CPU, while smartphone royalty deceleration, supply constraints, and low initial silicon margins reflect repricing pressures.
Figures in the text are as of 2026-08-26; the live price is shown at the top of the page.
Revenue was $1.29 billion, up 22% year over year. Royalties contributed $715 million, while licensing and other revenue was $574 million, including $193 million from the SoftBank agreement. Net income according to EDGAR was about $270 million and earnings per share were $0.25, while adjusted earnings per share reached $0.45.
Arm announced on July 29, 2026 that demand for Arm AGI CPU had exceeded $2 billion after adding customers in the United States and China. The company had identified an initial $1 billion opportunity across fiscal year 2027 and fiscal year 2028, then became more confident in exceeding it after securing the capacity needed for the initial amount and making progress in adding further supply. The processor targets general-purpose servers, host nodes, and agentic AI workloads, with announced customers including Cerebras, OpenAI, Meta, Cloudflare, and Oracle.
Data center royalty revenue more than doubled year over year in the first quarter of fiscal year 2027, and Neoverse shipments surpassed approximately 1.5 billion cores. NVIDIA Vera entered production, Google uses the Axion processor with its latest TPU systems, AWS plans to deploy tens of millions of Graviton5 cores, and Microsoft expanded Azure Cobalt 200 instances. Arm says the latest 500 million Neoverse cores were shipped in nine months, compared with six years for the first billion cores.
Automated analysis for informational purposes only — not investment advice.
Higher memory prices slowed phone demand across the low-, mid-, and high-end segments during fiscal year 2027. Management lowered its annual royalty growth estimate from about 20% to the high teens percentage range and guided to approximately 13% growth in the second quarter of fiscal year 2027. In contrast, increased adoption of Armv9 and compute systems, higher royalty rates, and cloud computing outperformance are helping offset part of the decline in phone units.
Arm expects revenue of $1.38 billion, plus or minus $50 million, equivalent to growth of approximately 22% at the midpoint. It expects licensing and other revenue to grow by about 30% year over year, compared with royalty growth in the low-to-mid teens percentage range, with the CFO later specifying an estimate of approximately 13%. It also expects adjusted operating expenses of approximately $780 million and adjusted earnings per share of $0.47, plus or minus $0.04.
Producing Arm AGI CPU requires securing chips, memory, substrates, testing capacity, and wafers from TSMC in a market that management described on July 29, 2026 as extremely tight. Arm confirmed that it had secured the capacity needed for the $1 billion opportunity and does not see a single point of failure that could disrupt execution, but it is still working to secure additional capacity to convert demand exceeding $2 billion into revenue. The first generation also starts with a margin in the high thirties to low forties percentage range, and the company does not expect to reach 50% until approximately two years later.
