Market Pulse59Neutral

Arm Holdings plc American Depositary SharesOpportunity Rank #210(ARM) Intrinsic Value & DCF Analysis (2026)

Sector: Technology

Current Price

$215.68

Last updated: May 08, 2026

Price vs Intrinsic Value

$215.68
Price
$29.93
Intrinsic Value
Overvalued by 86%MOS: $23.94

Fundamental Score

40/100
Bearish

Weighted across 6 signals

Narrative Score

80/100
Strong

No change vs previous

Trend Score

95/100
Strong

As of 2026-05-08

The intrinsic value of Arm Holdings plc American Depositary Shares (ARM) is estimated at $29.93 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $215.68, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a 7.10% long-term growth rate and a 12.00% discount rate (calculated: 12.15%), reflecting expected future free cash flow and cost of capital.

The intrinsic value of Arm Holdings plc American Depositary Shares (ARM) is estimated at $29.93 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $215.68, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a 7.10% long-term growth rate and a 12.00% discount rate (calculated: 12.15%), reflecting expected future free cash flow and cost of capital.

Valuation Details

$29.93
▼ -86.12% downside
20% margin of safety: $23.94
Years: 10Growth Rate: 7.10%
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Capital Efficiency

Average Quarterly ROIC
4.91%
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

40/100
BearishWeighted across 6 signals
DCF Discount
86.1% premium to price
0
FCF Yield
0.9% trailing FCF yield
0
ROIC vs WACC
ROIC 4.9% vs WACC 7.0% (0.7x)
35
Net Debt / FCF
Net cash position
100
Buybacks
Share count shrinking
80
FCF CAGR (5Y)
8.2% 5Y FCF CAGR
66
Strengths: Net Debt / FCF, Buybacks. Concerns: DCF Discount, FCF Yield.

Narrative Details

80/100
Strong
Vs 6-Month Baseline:Above Avg (78th pct)Weighted across 6 recent drivers
Trend: StableConfidence: 100%Updated: 16h ago
Sources: 228 (200 News · 28 Analyst)
Drivers(last 30 days)
175 news sentiment+7.4
11 regulatory scrutiny+0.6
Earnings beat+0.4
8 upgrade headlines+0.1
5 downgrade headlines-0.0
Analyst downgrades-0.0

Trend Details

95/100
StrongAs of 2026-05-08311 daily bars used
3M Relative Strength vs SPY+65.6%
21 EMA vs 50 EMA+15.1%
Price vs 50 EMA+25.5%
Price vs 21 EMA90 · +9.1%
Price vs 50 EMA99 · +25.5%
21 EMA vs 50 EMA99 · +15.1%
3M RS vs SPY100 · +65.6%
6M RS vs SPY94 · +24.3%
Distance from 52W High80 · -10.1%

Investment Coach

Updating... 1d ago
AVOIDConfidence: 78%
Thesis
Arm Holdings plc is currently significantly overvalued with its market price approximately 85.5% above estimated fair value, supported by a strong narrative score but weak fundamentals. The company’s returns are trailing its cost of capital, indicating operational challenges despite a stable and improving narrative trend.
Key Risk
The primary risk is that Arm’s fundamental weaknesses and negative spread between ROIC and WACC may persist or worsen, undermining value realization.
Signals To Watch
  • Price moves to at least a mid-teens discount to fair value
  • Sustained improvement in ROIC versus WACC spread
  • Meaningful shifts in the narrative score direction
Ask the Coach - Available with
Historical Growth Rates
Free Cash Flow- - -Trend CAGR: 11.90%5 Year CAGR: 8.23%

Free Cash Flow (in millions)

TTM20252024202320222021
$2,076$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.