ARM Holdings PLC ADR

ARM: XNAS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$81.00	Kdfb	Ykjmrkrw

Arm Holdings: A Wide Moat at a Lofty Valuation; Initiating With a $34 Fair Value Estimate

Javier Correonero

Oct 16, 2023

We initiate coverage of Arm Holdings with a wide moat rating and a $34 fair value estimate, implying an enterprise value to EBIT multiple of 41 and 31 times for fiscal-year 2024 and 2025, respectively. We struggle to justify Arm’s lofty IPO valuation despite its good growth prospects. At Arm’s IPO price debut of $51 per share, the same EBIT multiples would be 59 and 41 times, respectively.

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