Latest Ratios: P/E Ratio 353.4x · EV/EBITDA 274.3x · ROE 12.0%. (2022–2026 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|---|
| Market Cap | $319.7B | $161.6B | $113.5B | $130.6B | — | — |
| Enterprise Value | $317.3B | $159.2B | $111.8B | $128.9B | — | — |
| P/E Ratio → | 353.45 | 177.98 | 142.39 | 431.00 | — | — |
| P/S Ratio | 64.97 | 32.84 | 28.33 | 40.38 | — | — |
| P/B Ratio | 38.72 | 19.50 | 16.60 | 24.66 | — | — |
| P/FCF | 326.51 | 165.03 | 637.74 | 137.86 | — | — |
| P/OCF | 209.75 | 106.02 | 285.94 | 119.77 | — | — |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|---|
| EV / Revenue | — | 32.37 | 27.90 | 39.86 | — | — |
| EV / EBITDA | 274.28 | 137.64 | 110.69 | 493.70 | — | — |
| EV / EBIT | 349.49 | 175.38 | 155.26 | 607.81 | — | — |
| EV / FCF | — | 162.66 | 628.03 | 136.07 | — | — |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|---|
| Gross Margin | 92.5% | 92.5% | 94.9% | 92.8% | 92.7% | 91.9% |
| Operating Margin | 18.5% | 18.5% | 20.6% | 3.1% | 25.3% | 25.2% |
| Net Profit Margin | 18.4% | 18.4% | 19.8% | 9.5% | 19.6% | 20.3% |
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|---|
| ROE | 12.0% | 12.0% | 13.1% | 6.5% | 13.8% | 15.5% |
| ROA | 9.2% | 9.2% | 9.4% | 4.1% | 7.8% | 8.4% |
| ROIC | 12.3% | 12.3% | 14.2% | 2.4% | 18.4% | 18.2% |
| ROCE | 10.3% | 10.3% | 11.5% | 1.7% | 12.8% | 13.3% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|---|
| Debt / Equity | 0.05 | 0.05 | 0.05 | 0.04 | 0.05 | 0.07 |
| Debt / EBITDA | 0.37 | 0.37 | 0.35 | 0.87 | 0.26 | 0.30 |
| Net Debt / Equity | — | -0.28 | -0.25 | -0.32 | -0.33 | -0.21 |
| Net Debt / EBITDA | -2.00 | -2.00 | -1.71 | -6.50 | -1.57 | -0.87 |
| Debt / FCF | — | -2.37 | -9.71 | -1.79 | -2.07 | -1.94 |
| Interest Coverage | — | — | — | — | — | — |
Net cash position: cash ($2.8B) exceeds total debt ($432M)
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|---|
| Current Ratio | 6.00 | 6.00 | 5.20 | 2.79 | 2.60 | 2.22 |
| Quick Ratio | 6.00 | 6.00 | 5.20 | 2.79 | 2.60 | 2.22 |
| Cash Ratio | 3.46 | 3.46 | 3.04 | 1.94 | 1.63 | 1.17 |
| Asset Turnover | — | 0.46 | 0.45 | 0.41 | 0.39 | 0.42 |
| Inventory Turnover | — | — | — | — | — | — |
| Days Sales Outstanding | — | 168.92 | 172.89 | 127.46 | 158.73 | 174.20 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|---|
| Dividend Yield | — | — | — | — | — | — |
| Payout Ratio | — | — | — | — | — | — |
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|---|
| Earnings Yield | 0.3% | 0.6% | 0.7% | 0.2% | — | — |
| FCF Yield | 0.3% | 0.6% | 0.2% | 0.7% | — | — |
| Buyback Yield | 0.0% | 0.0% | 0.0% | 0.0% | — | — |
| Total Shareholder Yield | 0.0% | 0.0% | 0.0% | 0.0% | — | — |
| Shares Outstanding | — | $1.1B | $1.1B | $1.0B | $1.0B | $1.0B |
Geopolitical and licensing concentration
Based on current market data, ARM trades at a P/E of 393.26, a multiple that significantly exceeds traditional semiconductor peers and suggests investors are pricing in an aggressive long-term growth trajectory tied to the company's unique role as a foundational infrastructure provider for the global AI ecosystem.
The extreme valuation premium relative to EDA peers like Synopsys and Cadence indicates that the market views ARM not as a standard software-licensing firm, but as a critical toll-taker on the entire semiconductor industry. Investors should monitor whether this valuation can be sustained if the transition to higher-royalty ARMv9 architectures fails to materialize at the expected pace.
As reported in recent financial statements, ARM's ROIC has fluctuated between 0.4% and 6.3% over the last ten quarters, reflecting a period of intense capital deployment into R&D that currently suppresses the company's ability to generate high returns on its invested capital base.
The low ROIC relative to peers like Qualcomm suggests that the company is in a heavy investment phase, prioritizing long-term architectural dominance over immediate capital efficiency. This trend warrants further investigation to determine if these investments will eventually yield the compounding returns expected of a high-moat intellectual property business.
Based on reported figures, ARM's DSO has remained elevated, peaking at 175 days in 2026Q1, which suggests that the company's cash conversion cycle is significantly hampered by the long-term nature of its licensing contracts and the inherent complexity of its global customer payment structures.
The high and volatile DSO indicates that ARM lacks the immediate cash-collection efficiency of typical software-as-a-service models, creating a disconnect between recognized revenue and actual cash inflows. This inefficiency appears to be a structural byproduct of the licensing business model, which investors should account for when assessing the company's true operational agility.
According to the latest quarterly filings, ARM maintains a D/E ratio of 0.05 as of 2026Q4, demonstrating a conservative capital structure that provides the company with significant financial flexibility to navigate potential geopolitical shocks or cyclical downturns in the semiconductor industry without immediate refinancing risk.
The company's minimal reliance on debt is a key strength, allowing it to maintain R&D spending even during periods of revenue volatility. This fortress-like balance sheet appears to be a strategic choice, ensuring that the firm remains insulated from interest rate fluctuations while it continues to scale its high-value compute architectures.
The P/E ratio is frequently misapplied to ARM's business model, as it fails to account for the significant non-cash impact of stock-based compensation and the lumpy nature of licensing revenue, which together distort the company's true underlying earnings power and cash-generating potential for shareholders.
Investors should instead focus on metrics like Remaining Performance Obligations (RPO) and adjusted free cash flow, which better capture the long-term value of signed contracts and the actual cash conversion of the business. Relying on GAAP P/E ratios likely leads to an inaccurate assessment of the company's valuation relative to its actual economic performance.
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Quick answers to the most common questions about buying ARM stock.
Arm Holdings plc American Depositary Shares's current P/E ratio is 353.4x. The historical average is 160.2x. This places it at the 100th percentile of its historical range.
Arm Holdings plc American Depositary Shares's current EV/EBITDA is 274.3x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA.
Arm Holdings plc American Depositary Shares's return on equity (ROE) is 12.0%. The historical average is 12.2%.
Based on historical data, Arm Holdings plc American Depositary Shares is trading at a P/E of 353.4x. This is at the 100th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Arm Holdings plc American Depositary Shares has 92.5% gross margin and 18.5% operating margin. Operating margin between 10-20% is typical for established companies.
Arm Holdings plc American Depositary Shares's Debt/EBITDA ratio is 0.4x, indicating low leverage. A ratio below 2x is generally considered financially healthy.