Does ARM Holdings Support Rising Prices?
With shares of ARM Holdings (NASDAQ:ARMH) trading around $49, is ARMH an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s Movement
ARM Holdings engages in the design of microprocessors, physical intellectual property, and related technology and software. It also sells development tools that enhance the performance of embedded applications. The company operates in three segments: the Processor Division, the Physical IP Division, and the System Design Division. Its products include microprocessors cores that consist of specific functions such as graphics IP, fabric IP, embedded software IP, and configurable digital signal processing IP.
ARM Holdings reported earnings and revenues figures that have not impressed investors. However, ARM enters the final quarter of 2013 with a record order backlog and a robust opportunity pipeline. This combination points to another strong quarter for licensing revenue in Q4. Simon Segars, Chief Executive Officer said, “as the products we use every day become more connected, and as new categories of smart devices are introduced, there are increasing opportunities for ARM’s high-performance, low-power technology, which drive both license and long-term royalty revenues.”