Rosenblatt raises ARM Holdings stock target to $225, keeps Buy rating

On Thursday, Rosenblatt Securities adjusted its outlook for Arm Holdings (NASDAQ:ARM), increasing the price target on the company’s stock to $225 from the previous $180. The firm has also reaffirmed its Buy rating for the semiconductor and software design company. The stock, currently trading at $173.26, has shown remarkable momentum with a 13% gain in the past week alone. According to InvestingPro data, ARM has delivered an impressive 137% return over the past year.

The revision by Rosenblatt comes on the heels of an analysis of Arm Holdings ’ financial projections. The research firm has updated its fiscal year 2025 (FY25) revenue and non-GAAP (Generally Accepted Accounting Principles) earnings per share (EPS) estimates slightly upward. The new estimates are set at $3.99 billion in revenue and $1.62 in EPS, compared to the previous forecast of $3.95 billion and $1.55, respectively. InvestingPro analysis shows the company maintains strong financial health with a current ratio of 4.52 and operates with minimal debt, as evidenced by a debt-to-equity ratio of just 0.04.

For the fiscal year 2026 (FY26), Rosenblatt’s estimates remain steady, predicting revenues to hit $5.0 billion and EPS to reach $2.20. The optimism towards Arm Holdings’ future earnings is reflected in the price target change, with expectations of earnings exceeding $3.00 per share for the fiscal year 2027 (FY27).

The increased price target to $225 is based on applying an 80x price-to-earnings (P/E) multiple to the anticipated earnings power for FY27. This adjustment indicates Rosenblatt’s confidence in the growth trajectory and profitability of Arm Holdings in the coming years.

Arm Holdings, a prominent player in the semiconductor industry, is expected to benefit from the robust demand for its chip designs that are widely used in mobile devices, data centers, and emerging technologies such as the Internet of Things (IoT). The company’s stock performance and investor sentiment will likely be influenced by its ability to meet these financial targets and maintain its competitive edge in the evolving tech landscape. With a remarkable gross profit margin of 96% and revenue growth of 24.6% in the last twelve months, ARM shows strong operational efficiency. For deeper insights into ARM’s valuation and growth prospects, including 16 additional ProTips and comprehensive financial analysis, explore the full research report available on InvestingPro.

In other recent news, ARM Holdings (LON:ARM) has garnered attention from multiple analysts following its December quarter financial report. Mizuho (NYSE:MFG) Securities increased ARM’s stock price target to $180, maintaining an Outperform rating. The company’s reported revenues of $983 million surpassed consensus estimates of $948 million. Jefferies also raised ARM’s stock price target, this time to $195, forecasting a 24% revenue growth for fiscal year 2025. They attribute this growth to a combination of licensing and royalty increases.

HSBC, despite a Reduce rating on the stock, lifted ARM’s stock price target to $115. UBS reaffirmed a Buy rating and a $215.00 price target, citing several encouraging signs from the quarter, including an uptick in CSS demand. Evercore ISI, maintaining an Outperform rating, increased the price target to $202.00, citing ARM’s advantageous position as a major beneficiary of AI technology integration at the edge.

These developments underscore ARM’s strong performance and positive outlook, with analysts highlighting the company’s growth potential, particularly in the AI sector. As these are recent events, investors are advised to keep a close eye on ARM’s progress in the tech industry.

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