Market Pulse44Neutral

Arm Holdings plc American Depositary SharesOpportunity Rank #191(ARM) Intrinsic Value & DCF Analysis (2026)

Sector: Technology

Current Price

$407.72

Last updated: Jun 23, 2026

Price vs Intrinsic Value

$407.72
Price
$30.30
Intrinsic Value
Overvalued by 93%MOS: $24.24

Fundamental Score

41/100
Bearish

Weighted across 6 signals

Narrative Score

67/100
Improving

-1 vs previous

Trend Score

98/100
Strong

As of 2026-06-22

The intrinsic value of Arm Holdings plc American Depositary Shares (ARM) is estimated at $30.30 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $407.72, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a 7.13% long-term growth rate and a 12.00% discount rate (calculated: 12.16%), reflecting expected future free cash flow and cost of capital.

The intrinsic value of Arm Holdings plc American Depositary Shares (ARM) is estimated at $30.30 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $407.72, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a 7.13% long-term growth rate and a 12.00% discount rate (calculated: 12.16%), reflecting expected future free cash flow and cost of capital.

Valuation Details

$30.30
▼ -92.57% downside
20% margin of safety: $24.24
Years: 10Growth Rate: 7.13%
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Capital Efficiency

Average Quarterly ROIC
5.07%
Cost of Capital (estimated)7%
Value StatusUnderperforming Capital

The company is earning below its required return. This may indicate inefficient use of capital or excess cash that isn't being reinvested.

Complete historical ROIC is available with
.

Fundamental Details

41/100
BearishWeighted across 6 signals
DCF Discount
92.6% premium to price
0
FCF Yield
0.5% trailing FCF yield
0
ROIC vs WACC
ROIC 5.1% vs WACC 7.0% (0.7x)
36
Net Debt / FCF
Net cash position
100
Buybacks
Share count shrinking
80
FCF CAGR (5Y)
8.4% 5Y FCF CAGR
67
Strengths: Net Debt / FCF, Buybacks. Concerns: DCF Discount, FCF Yield.

Narrative Details

67/100
Improving
-1 vs previousVs 6-Month Baseline:Below Avg (33rd pct)Weighted across 6 recent drivers
Trend: Deteriorating downConfidence: 89%Updated: 4h ago
Sources: 201 (171 News · 30 Analyst)
Drivers(last 30 days)
151 news sentiment+1.4
3 upgrade headlines+0.2
12 regulatory scrutiny+0.2
2 analyst downgrades-0.2
Margin pressure+0.0
Earnings beat+0.0

Trend Details

98/100
StrongAs of 2026-06-22308 daily bars used
3M Relative Strength vs SPY+193.3%
6M Relative Strength vs SPY+245.0%
21 EMA vs 50 EMA+22.9%
Price vs 21 EMA97 · +14.2%
Price vs 50 EMA100 · +40.3%
21 EMA vs 50 EMA100 · +22.9%
3M RS vs SPY100 · +193.3%
6M RS vs SPY100 · +245.0%
Distance from 52W High86 · -7.2%

Investment Coach

Updating... 12d ago
AVOIDConfidence: 78%
Thesis
Arm Holdings plc is significantly overvalued with its current price nearly 90% above the estimated fair value, supported by weak fundamentals and returns trailing the cost of capital. Despite a moderately supportive narrative, the overall outlook remains bearish due to deteriorating trends and poor financial metrics.
Key Risk
The key risk is that the company's returns on invested capital may improve and surpass the weighted average cost of capital, potentially justifying a higher valuation.
Signals To Watch
  • Price moving to at least a mid-teens discount to fair value
  • ROIC vs WACC spread showing sustained improvement
  • Meaningful shifts in the narrative score direction
Ask the Coach - Available with
Historical Growth Rates
Free Cash Flow- - -Trend CAGR: 12.18%5 Year CAGR: 8.45%

Free Cash Flow (in millions)

TTM20252024202320222021
$2,097$616$1,233$832$533$1,398

How Intrinziq Estimates Fair Value

Intrinziq estimates Arm Holdings plc American Depositary Shares's intrinsic value using a discounted cash flow (DCF) model based on free cash flow trends and a market-based discount rate. The model projects future cash flows over ten years and discounts them using a market return assumption to estimate fair value.

Arm Holdings plc American Depositary SharesTechnology

Arm Holdings plc is a leading technology firm that conceptualizes, engineers, and licenses core processing unit (CPU) designs and complementary technologies. These foundational innovations are crucial for semiconductor manufacturers and original equipment manufacturers (OEMs) to develop their own products. The company's diverse portfolio encompasses microprocessors, comprehensive system intellectual property (IP) solutions, graphics processing units (GPUs), physical IP alongside its associated system IPs, various software offerings, development tools, and an array of supplementary services. Its technology underpins a wide spectrum of industries, including the automotive sector, advanced computing infrastructure, consumer electronics, and the burgeoning Internet of Things (IoT) landscape. Established in 1990, Arm Holdings plc maintains its corporate headquarters in Cambridge, United Kingdom. With a significant global footprint, Arm conducts operations across the United States, the People's Republic of China, Taiwan, South Korea, and numerous other international regions. Currently, Arm Holdings plc functions as a subsidiary entity of Kronos II LLC.