CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We raise our 12-month target to $140 from $90, on a peer-premium P/E of 72.7x our CY 25 EPS estimate, warranted given our view of growth prospects. We up our above-consensus FY 25 (Mar.) EPS estimate to $1.76 from $1.60 and FY 26’s to $2.00 from $1.87. Ahead of Mar-Q results expected on May 8, we expect ARM to exceed expectations for both EPS ($0.30) and revenue ($869M), as the company has tailwinds tied to both its mobility and data center end markets, supporting licensing/royalty upside. On the mobility front, we think adoption for ARM’s v9-based architecture has a long runway, which has 2x the royalty rate of its predecessor (only 15% of royalty revenue). With regards to data centers, ARM continues to hold a small share of the market with significant upside potential given next-gen AI GPUs and CPUs expected to enter the market over the next 18 months. That said, we await a better entry point as ARM’s excessive valuation keeps us at Hold, with shares now trading well above 60x our CY 25 expectations.