Market Pulse50Neutral

Arm Holdings plc American Depositary SharesOpportunity Rank #267(ARM) Intrinsic Value & DCF Analysis (2026)

Sector: Technology

Current Price

$136.89

Last updated: Mar 24, 2026

Price vs Intrinsic Value

$136.89
Price
$32.84
Intrinsic Value
Overvalued by 76%MOS: $26.27

Fundamental Score

23/100
Bearish

Weighted across 6 signals

Narrative Score

81/100
Strong

-1 vs previous

The intrinsic value of Arm Holdings plc American Depositary Shares (ARM) is estimated at $32.84 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $136.89, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a 9.24% long-term growth rate and a 12.12% discount rate, reflecting expected future free cash flow and cost of capital.

The intrinsic value of Arm Holdings plc American Depositary Shares (ARM) is estimated at $32.84 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $136.89, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a 9.24% long-term growth rate and a 12.12% discount rate, reflecting expected future free cash flow and cost of capital.

Valuation Details

$32.84
▼ -76.01% downside
20% margin of safety: $26.27
Years: 10Growth Rate: 9.24%
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Capital Efficiency

Average Quarterly ROIC
4.69%
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

23/100
BearishWeighted across 6 signals
DCF Discount
76.0% premium to price
0
FCF Yield
1.4% trailing FCF yield
0
ROIC vs WACC
ROIC 4.7% vs WACC 7.0% (0.7x)
34
Net Debt / FCF
Net cash position
100
Buybacks
Share count flat
50
FCF CAGR (5Y)
0.0% 5Y FCF CAGR
0
Strengths: Net Debt / FCF. Concerns: DCF Discount, FCF Yield.

Narrative Details

81/100
Strong
-1 vs previous · +1 new driversVs 6-Month Baseline:High (97th pct)Weighted across 6 recent drivers
Trend: Improving upConfidence: 100%Updated: 54m ago
Sources: 99 (84 News · 15 Analyst)
Drivers(last 30 days)
5 upgrade headlines+1.9
68 news sentiment+1.0
8 regulatory scrutiny+0.6
2 analyst upgrades+0.2
2 earnings beat+0.0
Earnings miss+0.0

Investment Coach

Updated 12h ago
AVOIDConfidence: 78%
Thesis
Arm Holdings plc is currently overvalued with its market price significantly exceeding the estimated fair value by approximately 75%, and its fundamentals are weak with returns trailing its cost of capital. Despite a strong and improving narrative score, the financial metrics suggest caution.
Key Risk
The key risk is that the company's return on invested capital remains below its weighted average cost of capital, indicating potential value destruction.
Signals To Watch
  • Price moving to at least a mid-teens discount to fair value
  • Sustained improvement in ROIC versus WACC spread
  • Meaningful shifts in the narrative score direction
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Historical Growth Rates
Free Cash Flow- - -Trend CAGR: 11.88%5 Year CAGR: 8.21%

Free Cash Flow (in millions)

TTM20252024202320222021
$2,074$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 architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers rely on to develop products. It offers microprocessors, systems intellectual property (IPs), graphics processing units, physical IP and associated systems IPs, software, tools, and other related services. Its products are used in various markets, such as automotive, computing infrastructure, consumer technologies, and Internet of things. The company operates in the United States, the People's Republic of China, Taiwan, South Korea, and internationally. The company was founded in 1990 and is headquartered in Cambridge, the United Kingdom. Arm Holdings plc operates as a subsidiary of Kronos II LLC.