Arm Holdings plc (ARM): a likely value trap?
Avoid — it's still priced for perfection (P/E over 300x) after a valuation unwind, not a genuine bargain.
Fell 21% in 10 trading day(s) — now $281.17
Why ARM dropped
The drop is a multi-week "growth stock" de-rating in AI/semiconductor names plus an HSBC downgrade to Hold on July 14 citing foundry capacity bottlenecks that could cap near-term earnings, not any fraud, guidance cut, or lost customer.
Fwd P/E 91.3Op margin 29.5%Rev growth 20.1%Debt/equity 5.9%Analyst upside 6.3%
How this scored 70/100
✅ Passes all 4 hard checks — profitable, cash-generative, and financially survivable.
Makes money
Net profit margin 18.4%
Generates cash
Free cash flow $750M
Not drowning in debt
Debt/equity 5.9% (limit 200%)
Can pay its bills
Current ratio 6.0 (needs 1+)
Bar length shows how much each metric is worth — a 10-point metric is twice as wide as a 5-point one. Hover any row for what it means.
Profitability
Does it actually make money?
19/25
Operating margin
29.5%
9/9
Net profit margin
18.4%
7/8
Return on equity
12.0%
3/8
Growth
Is it getting bigger, or dying?
24/25
Revenue growth
20.1%
8/9
Earnings growth
47.9%
8/8
Expected profit change
266.8%
8/8
Value
Is it cheap right now?
2/25
Forward P/E
91.3
0/10
PEG ratio
2.7
1/8
Analyst target upside
6.3%
1/7
Balance sheet
Will it survive?
25/25
Debt / equity
5.9%
10/10
Current ratio
6.0
8/8
Free cash flow
$750M
7/7
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Analysis generated by SmartStonks's AI from public fundamentals and news, first flagged 2026-07-15. Research only — not financial advice.