CFRA Maintains Hold Opinion On Shares Of Arm Holdings Plc

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.

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