Evercore ISI Reiterates Outperform on Arm Holdings, $326 PT

Evercore ISI analyst Mark Lipacis reiterated an Outperform rating and $326 price target on Arm Holdings (NASDAQ: ARM).

“We Still Buyers of ARM, after it posted JunQ EPS that beat by 12% and provided an outlook for SepQ EPS that was 7% above.

The company downticked its outlook for royalties to increase in the high-teens % this FY from its original expectations for 20%, due in part to weakness in smartphones that has spread from low-end SKUs to the mid-range and even upper tiers.

The weakness in smartphone royalties is being offset by strength in data center royalties and better licensing, and the company expects FY27 revenues of $6bn, slightly above consensus.

We continue to view ARM as a key beneficiary of our “CPU Renaissance” thesis, and forecast base/bull 2030 EPS power of $21/$40.

Our price target is $326, based on P/E ratio of 23x our 2030 base case EPS of $20.74, discounted back four year.”

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