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On July 1, 2026 Arm completed the acquisition of DreamBig for approximately $265.0 million in cash. The company has expanded its compute platform into production silicon, describing the Arm AGI CPU as a production silicon product with production expected by the end of calendar 2026. Arm’s newsroom and partner announcements through July–August highlighted ecosystem deployments and partner platforms using Arm-based CPUs for AI infrastructure and edge applications.
Technical Analysis
ADX (16.88) indicates no established trend strength, so directional signals carry limited conviction for sustained moves.
DI+ at 34.21 with a dip-and-reversal signals bullish directional pressure, while DI– at 20.96 with a peak-and-reversal also signals reduced downside pressure; together they suggest a bullish initiation without confirmed trend strength.
MACD at 2.30 sits above its signal line at −4.05, reflecting a bullish momentum crossover and a dip-and-reversal in momentum.
MRO at 25.48 and rising places the market price above the model target, implying heightened mean‑reversion risk even as momentum builds.
RSI at 50.39 with a dip-and-reversal shows momentum recovery from a prior pullback rather than overbought exhaustion.
Price behavior favors the bulls on moving averages: the close at $322.90 exceeds the 50‑day average ($261.05) and the 200‑day average ($208.22), while the close sits above the 2× Bollinger upper band ($308.27), increasing the chance of a short corrective move before a continuation. Elevated short‑term volatility, shown by a 42‑day beta of 4.49 and a 52‑week beta of 3.46, magnifies swing risk.
Fundamental Analysis
Total revenue for the period reached $1,289,000,000 with YoY revenue change at −10.95% and QoQ revenue growth at −167.56%, indicating sequential softness. Net income of $270,000,000 produces an approximate net margin of 20.95%, which supports cash flow despite top‑line contraction.
EBIT of $98,000,000 yields an EBIT margin of 7.60%, well below the industry peer mean of 63.35% and the industry peer median of 60.34%, which compresses valuation support relative to higher‑margin peers.
EPS came in at $0.45 versus an estimate of $0.40, a $0.05 beat and a 12.50% EPS surprise, providing a near‑term earnings beat signal for fundamentals-driven traders.
Free cash flow totaled $694,000,000, but free‑cash‑flow growth shows decline: QoQ fell 51.72% and YoY fell 62.65%, reducing near‑term cash growth momentum. Free‑cash‑flow yield at 0.23% sits below the industry peer mean of 1.87%.
Liquidity and leverage present a favorable profile: cash and short‑term investments total $3,888,000,000 and the current ratio registers 5.25x, above the industry peer mean current ratio of 2.72x; total debt equals $464,000,000 with a debt‑to‑assets ratio of 4.14%, below the industry peer mean of 11.97%.
Growth and profitability trends show deterioration: YoY earnings growth stands negative at approximately −31.25% and operating margin contracted QoQ by −74.25%, both weighing on fundamental upside despite product expansion into production silicon and strategic M&A activity.
Valuation remains elevated. Price multiples show a trailing P/E of 634.08 and a P/S of 235.54, while enterprise value metrics (EVR 232.88, enterprise multiple 1,735.19) highlight significant premium pricing relative to cash flow and earnings. The current valuation as determined by WMDST: over‑valued.
MOST-RECENT QUARTERLY REPORT
| REPORT PERIOD ENDING: | 2026-06-30 |
| REPORT DATE: | 2026-07-29 |
| NEXT REPORT DATE: | 2026-10-28 |
| CASH FLOW | Begin Period Cash Flow | $ 2.8 B |
| Operating Cash Flow | $ 902.0 M | |
| Capital Expenditures | $ -208.00 M | |
| Change In Working Capital | $ 389.0 M | |
| Dividends Paid | — | |
| Cash Flow Delta | $ 307.0 M | |
| End Period Cash Flow | $ 3.1 B | |
| INCOME STATEMENT | REVENUE | |
| Total Revenue | $ 1.3 B | |
| Forward Revenue | $ 973.5 M | |
| COSTS | ||
| Cost Of Revenue | $ 36.0 M | |
| Depreciation | $ 75.0 M | |
| Depreciation and Amortization | $ 75.0 M | |
| Research and Development | $ 838.0 M | |
| Total Operating Expenses | $ 1.2 B | |
| PROFITABILITY | ||
| Gross Profit | $ 1.3 B | |
| EBITDA | $ 173.0 M | |
| EBIT | $ 98.0 M | |
| Operating Income | $ 98.0 M | |
| Interest Income | $ 31.0 M | |
| Interest Expense | — | |
| Net Interest Income | $ 31.0 M | |
| Income Before Tax | $ 253.0 M | |
| Tax Provision | $ -17.00 M | |
| Tax Rate | 40.0 % | |
| Net Income | $ 270.0 M | |
| Net Income From Continuing Operations | $ 270.0 M | |
| EARNINGS | ||
| EPS Estimate | $ 0.40 | |
| EPS Actual | $ 0.45 | |
| EPS Difference | $ 0.05 | |
| EPS Surprise | 12.5 % | |
| Forward EPS | $ 0.76 | |
| BALANCE SHEET | ASSETS | |
| Total Assets | $ 11.2 B | |
| Intangible Assets | $ 1.8 B | |
| Net Tangible Assets | $ 6.8 B | |
| Total Current Assets | $ 6.3 B | |
| Cash and Short-Term Investments | $ 3.9 B | |
| Cash | $ 3.1 B | |
| Net Receivables | $ 1.1 B | |
| Inventory | — | |
| Long-Term Investments | $ 246.0 M | |
| LIABILITIES | ||
| Accounts Payable | — | |
| Short-Term Debt | — | |
| Total Current Liabilities | $ 1.2 B | |
| Net Debt | — | |
| Total Debt | $ 464.0 M | |
| Total Liabilities | $ 2.6 B | |
| EQUITY | ||
| Total Equity | $ 8.6 B | |
| Retained Earnings | $ 4.7 B | |
| VALUATION & PER-SHARE METRICS | EQUITY & PER-SHARE METRICS | |
| Book Value Per-Share | $ 8.11 | |
| Shares Outstanding | 1.068 B | |
| Revenue Per-Share | $ 1.21 | |
| VALUATION | Market Capitalization | $ 303.6 B |
| Enterprise Value | $ 300.2 B | |
| Enterprise Multiple | 1735.19 | |
| Enterprise Multiple QoQ | 444.167 % | |
| Enterprise Multiple YoY | 105.341 % | |
| Enterprise Multiple IPRWA | ARM: 1735.19 high: 462.704 mean: 48.849 median: 8.516 low: -178.78 |
|
| EV/R | 232.884 | |
| CAPITAL STRUCTURE | ||
| Asset To Equity | 1.297 | |
| Asset To Liability | 4.363 | |
| Debt To Capital | 0.051 | |
| Debt To Assets | 0.041 | |
| Debt To Assets QoQ | -2.951 % | |
| Debt To Assets YoY | -1.684 % | |
| Debt To Assets IPRWA | high: 0.475 mean: 0.12 median: 0.105 ARM: 0.041 low: 0.006 |
|
| Debt To Equity | 0.054 | |
| Debt To Equity QoQ | -2.502 % | |
| Debt To Equity YoY | -4.849 % | |
| Debt To Equity IPRWA | high: 1.671 mean: 0.199 median: 0.153 ARM: 0.054 low: 0.006 |
|
| PRICE-BASED VALUATION | ||
| Price To Book (P/B) | 35.181 | |
| Price To Book QoQ | 75.516 % | |
| Price To Book YoY | 64.842 % | |
| Price To Book IPRWA | ARM: 35.181 high: 24.581 mean: 10.051 median: 1.672 low: 0.566 |
|
| Price To Earnings (P/E) | 634.078 | |
| Price To Earnings QoQ | 143.737 % | |
| Price To Earnings YoY | 54.335 % | |
| Price To Earnings IPRWA | ARM: 634.078 high: 304.104 mean: 113.275 median: 96.258 low: 38.485 |
|
| PE/G Ratio | -25.363 | |
| Price To Sales (P/S) | 235.541 | |
| Price To Sales QoQ | 111.308 % | |
| Price To Sales YoY | 65.853 % | |
| Price To Sales IPRWA | ARM: 235.541 high: 88.602 mean: 32.022 median: 8.466 low: 2.348 |
|
| FORWARD MULTIPLES | ||
| Forward P/E | 367.889 | |
| Forward PE/G | -14.716 | |
| Forward P/S | 311.558 | |
| EFFICIENCY | OPERATIONAL | |
| Operating Leverage | 5.762 | |
| ASSET & SALES | ||
| Asset Turnover Ratio | 0.118 | |
| Asset Turnover Ratio QoQ | -17.523 % | |
| Asset Turnover Ratio YoY | 2.445 % | |
| Asset Turnover Ratio IPRWA | high: 0.217 median: 0.141 mean: 0.138 ARM: 0.118 low: 0.016 |
|
| Receivables Turnover | 1.066 | |
| Receivables Turnover Ratio QoQ | -18.318 % | |
| Receivables Turnover Ratio YoY | 22.564 % | |
| Receivables Turnover Ratio IPRWA | high: 3.9 median: 3.181 mean: 2.703 low: 1.192 ARM: 1.066 |
|
| Inventory Turnover | — | |
| Inventory Turnover Ratio QoQ | — | |
| Inventory Turnover Ratio YoY | — | |
| Inventory Turnover Ratio IPRWA | — | |
| Days Sales Outstanding (DSO) | 85.622 | |
| CASH CYCLE | ||
| Cash Conversion Cycle Days (CCC) | 85.622 | |
| Cash Conversion Cycle Days QoQ | — | |
| Cash Conversion Cycle Days YoY | — | |
| Cash Conversion Cycle Days IPRWA | high: 247.361 ARM: 85.622 mean: 58.599 median: 23.144 low: -31.676 |
|
| CAPITAL DEPLOYMENT | ||
| Cash Conversion Ratio | 0.251 | |
| CapEx To Revenue | -0.161 | |
| CapEx To Depreciation | -2.773 | |
| CAPITAL, LIQUIDITY & COVERAGE | CAPITAL STRUCTURE | |
| Total Capital | $ 8.6 B | |
| Net Invested Capital | $ 8.6 B | |
| Invested Capital | $ 8.6 B | |
| Net Tangible Assets | $ 6.8 B | |
| Net Working Capital | $ 5.1 B | |
| LIQUIDITY | ||
| Cash Ratio | 3.221 | |
| Current Ratio | 5.252 | |
| Current Ratio QoQ | -12.413 % | |
| Current Ratio YoY | 5.281 % | |
| Current Ratio IPRWA | high: 7.069 ARM: 5.252 mean: 2.724 median: 2.458 low: 0.557 |
|
| Quick Ratio | — | |
| Quick Ratio QoQ | — | |
| Quick Ratio YoY | — | |
| Quick Ratio IPRWA | — | |
| COVERAGE & LEVERAGE | ||
| Debt To EBITDA | 2.682 | |
| Cost Of Debt | 0.0 % | |
| Interest Coverage Ratio | 9800.0 | |
| Interest Coverage Ratio QoQ | -77.727 % | |
| Interest Coverage Ratio YoY | -14.035 % | |
| Interest Coverage Ratio IPRWA | ARM: 9800.0 high: 139.399 mean: 35.565 median: 14.054 low: -32.578 |
|
| Operating Cash Flow Ratio | 0.436 | |
| TIMING / LIQUIDITY | ||
| Days Payables Outstanding (DPO) | — | |
| DIVIDENDS | ||
| Dividend Coverage Ratio | — | |
| Dividend Payout Ratio | — | |
| Dividend Rate | — | |
| Dividend Yield | — | |
| PERFORMANCE | GROWTH | |
| Asset Growth Rate | 4.606 % | |
| Revenue Growth | -13.49 % | |
| Revenue Growth QoQ | -167.558 % | |
| Revenue Growth YoY | -10.951 % | |
| Revenue Growth IPRWA | high: 25.982 % mean: 14.291 % median: 12.016 % low: -2.905 % ARM: -13.49 % |
|
| Earnings Growth | -25.0 % | |
| Earnings Growth QoQ | -163.235 % | |
| Earnings Growth YoY | -31.251 % | |
| Earnings Growth IPRWA | high: 48.0 % median: 23.496 % mean: 20.918 % low: -2.959 % ARM: -25.0 % |
|
| MARGINS | ||
| Gross Margin | 97.207 % | |
| Gross Margin QoQ | -0.659 % | |
| Gross Margin YoY | 0.058 % | |
| Gross Margin IPRWA | ARM: 97.207 % high: 74.934 % mean: 68.422 % median: 67.721 % low: 25.243 % |
|
| EBIT Margin | 7.603 % | |
| EBIT Margin QoQ | -74.253 % | |
| EBIT Margin YoY | -29.771 % | |
| EBIT Margin IPRWA | high: 85.775 % mean: 63.348 % median: 60.344 % ARM: 7.603 % low: -43.145 % |
|
| Return On Sales (ROS) | 7.603 % | |
| Return On Sales QoQ | -74.253 % | |
| Return On Sales YoY | -29.771 % | |
| Return On Sales IPRWA | high: 65.596 % median: 60.344 % mean: 57.402 % ARM: 7.603 % low: -67.363 % |
|
| CASH FLOW | ||
| Free Cash Flow (FCF) | $ 694.0 M | |
| Free Cash Flow Yield | 0.229 % | |
| Free Cash Flow Yield QoQ | 124.51 % | |
| Free Cash Flow Yield YoY | 100.877 % | |
| Free Cash Flow Yield IPRWA | high: 2.672 % median: 2.672 % mean: 1.873 % ARM: 0.229 % low: -3.044 % |
|
| Free Cash Growth | 308.235 % | |
| Free Cash Growth QoQ | -5172.157 % | |
| Free Cash Growth YoY | -6264.7 % | |
| Free Cash Growth IPRWA | ARM: 308.235 % high: 176.013 % mean: 6.643 % median: -17.251 % low: -104.532 % |
|
| Free Cash To Net Income | 2.57 | |
| Cash Flow Margin | 40.807 % | |
| Cash Flow To Earnings | 1.948 | |
| VALUE & RETURNS | ||
| Economic Value Added | $ 0.04 | |
| Return On Assets (ROA) | 2.466 % | |
| Return On Assets QoQ | -17.745 % | |
| Return On Assets YoY | 73.784 % | |
| Return On Assets IPRWA | high: 7.835 % median: 7.835 % mean: 7.036 % ARM: 2.466 % low: -5.696 % |
|
| Return On Capital Employed (ROCE) | 0.981 % | |
| Return On Equity (ROE) | 0.031 | |
| Return On Equity QoQ | -17.156 % | |
| Return On Equity YoY | 68.679 % | |
| Return On Equity IPRWA | high: 0.298 mean: 0.153 median: 0.11 ARM: 0.031 low: -0.176 |
|
| DuPont ROE | 3.192 % | |
| Return On Invested Capital (ROIC) | 0.681 % | |
| Return On Invested Capital QoQ | -80.289 % | |
| Return On Invested Capital YoY | -53.002 % | |
| Return On Invested Capital IPRWA | high: 8.639 % median: 8.473 % mean: 7.773 % ARM: 0.681 % low: -6.171 % |
|