Buy ARM Stock For NVIDIA Like Gains?! | ARM Stock Analysis! |

Summary

ARM Holdingsは、2020年にNvidiaからの4000億ドルの買収に失敗した後、最近1億4700万ドルの株式を取得しました。このAIブームの中で、ARMの最新の収益や成長を分析し、競合他社と比較し、株主の利益を最大化するための適切な購入価格を探ります。ARMはCPU、GPU、NPUのIPを開発・ライセンスし、世界中の280億以上のチップにその技術が使用されています。しかし、株価の急上昇と比べて、売上高や利益の成長は不安定で、今後の成長予測にも懸念があります。

Takeaways

• 🚀 Nvidia曾试图以400亿美元收购ARM，但因监管问题在2020年失败。
• 📈 ARM自IPO以来表现强劲，股价自去年以来上涨了77.4%。
• 📊 ARM的市值约为1370亿美元，远小于Nvidia的近2万亿美元。
• 📉 ARM的营收增长在2022年到2023年期间相对平稳，但股价增长迅速。
• 💹 ARM的现金流健康，2022年现金1.6亿美元，债务2.41亿美元。
• 📝 ARM的自由现金流在过去12个月增长了63%，显示出强劲的财务表现。
• 🔄 ARM的股价与自由现金流增长不完全一致，存在一定的不一致性。
• 📌 机构投资者在过去一年中对ARM的持股增加了2.6亿美元。
• 📊 ARM的财务指标显示，其运营效率和资本分配能力良好。
• 💰 根据折现现金流模型，ARM的内在价值约为117美元，表明当前股价可能被高估。
• 🔮 华尔街对ARM未来12个月的目标价为100美元，认为其当前股价被极度高估。

Q & A

Nvidia为什么会失败收购ARM？

Nvidia在2020年尝试以400亿美元收购ARM，但由于监管问题未能成功。

ARM公司的主要业务是什么？

ARM公司主要业务是架构开发和授权高性能、低成本、高效的IP（知识产权），包括CPU、GPU和NPU的指令集。

ARM的市场份额有多大？

全球70%的人口使用基于ARM的产品，已出货超过2800亿颗芯片，99%的智能手机运行基于ARM的处理器。

ARM自IPO以来的表现如何？

自IPO以来，ARM的表现非常强劲，股价自去年9月的IPO以来上涨了77.4%。

ARM的财务状况如何？

ARM持有16亿美元现金，总债务相对较小，为2.21亿美元，现金远多于债务。

ARM的营收和利润增长情况如何？

ARM的营收在过去几年有所增长，但利润增长不一致，2021年为3.88亿美元，2022年增长到5.49亿美元，但2023年有所下降。

ARM的自由现金流表现如何？

ARM的自由现金流在过去12个月增长了63%，显示出良好的财务健康状况。

ARM的内部交易情况如何？

过去12个月，ARM没有内部买入或卖出的记录。

机构投资者对ARM的态度如何？

机构投资者在过去12个月中增持了ARM的股票，净买入额达到2.6亿美元。

ARM的估值模型显示其内在价值是多少？

根据折现现金流（DCF）模型，ARM的内在价值约为117美元，这表明当前股价可能被高估。

华尔街对ARM未来12个月的预期是什么？

华尔街对ARM未来12个月的价格目标为100美元，认为ARM目前被极度高估。

Outlines

00:00

📉 Nvidia's Failed Acquisition of ARM

Nvidia's attempt to acquire ARM for $40 billion in 2020 failed due to regulatory issues. However, Nvidia now holds a stake worth $147 million in ARM. The video discusses whether ARM, which licenses intellectual property for CPUs, GPUs, and NPU chips, is a good investment. ARM's products are used by 70% of the world's population, and 99% of smartphones run on ARM-based processors. The company's IPO performance has been strong, with a 77.4% increase since the IPO in September 2023. The video will analyze ARM's financial health, growth, and performance against competitors.

05:03

📈 ARM's Financial Performance and Market Position

The video script reviews ARM's financial performance, including revenue growth, earnings, and debt-to-cash ratios. ARM's top line has seen growth, but the bottom line has been inconsistent. The company's cash holdings have increased, and it has a positive net debt to EBITDA ratio. The script also discusses insider buying and selling activities, as well as institutional ownership, indicating strong institutional interest in ARM. The video will further analyze ARM's financial metrics, including free cash flow, sales growth, and return on investment.

10:04

🔍 Valuation and Future Outlook for ARM

The video script delves into ARM's valuation using the discounted cash flow (DCF) model, considering a conservative growth rate of 35%. The intrinsic value calculated is around $117, suggesting that ARM's current trading price of $147 is overvalued. The video also discusses the margin of safety and compares ARM's valuation with Wall Street's forecast, which targets a price of $100, indicating a potential downside. The video concludes with a reminder for viewers to do their own due diligence before investing.

Keywords

💡Nvidia

Nvidiaは、ビデオ内の企業の一つで、ARMの買収を試みたが失敗した企業です。この動画では、NvidiaがARMに関連する株式を保有していることが示されています。Nvidiaは、GPUやAI技術の分野で有名であり、ARMの技術を組み合わせることでさらに成長を図ろうとしていたと考えられます。

💡ARM

ARMは、CPU、GPU、NPUなどのチップの設計、開発、ライセンスを行っている企業です。ARMの技術は、スマートフォンやその他のデバイスに広く採用されており、世界中の人口の70%がARMベースの製品を使用しているとされています。この動画では、ARMのIPO以来のパフォーマンスや財務状況が分析されています。

💡Regulation issues

規制問題とは、企業の買収や合併などにおいて、関連する法規制や政策に抵触する可能性があることを指します。この動画では、NvidiaがARMを買収するために直面した規制問題が言及されています。このような問題は、企業の成長戦略に大きな影響を与えることがあります。

💡Artificial Intelligence (AI)

人工知能（AI）とは、コンピュータシステムが人間の知能を模倣し、学習、推論、問題解決などの能力を持つ技術です。この動画では、AIの発展がARMの成長にどのように影響を与えているかが分析されています。AIは、データ解析、自動運転車、自動翻訳など、様々な分野で応用されています。

💡IPO

IPO（Initial Public Offering）とは、企業が初めて株式を公開して株主から資金を調達することを指します。この動画では、ARMのIPO以来の株価上昇や財務パフォーマンスが焦点となっています。IPOは、企業の発展と市場への参入を促進する重要なステップです。

💡Top Line

トップライン（Top Line）とは、企業の売上高を指します。これは、企業が商品やサービスを販売することで得られる収入の総額です。この動画では、ARMのトップラインの成長が分析されており、これは企業の市場での成長や成功を示す重要な指標です。

💡Bottom Line

ボトムライン（Bottom Line）とは、企業の利益を指します。これは、売上から全ての費用を控除した純利益です。この動画では、ARMのボトムラインの成長や不整合さが分析されており、これは企業の財務健全性を評価する際に重要な指標です。

💡Insider Buys and Sales

インサイダー取引とは、企業の経営者や主要株主が自身の株式を買い入れたり、売却したりすることを指します。これらの取引は、市場に企業の内部情報が反映されていると見做されており、投資家の投資判断に影響を与えることがあります。この動画では、ARMのインサイダー取引が分析されており、これは株主にとって重要な情報源です。

💡Institution Ownership

機関所有とは、投資ファンド、保険会社、投資銀行などの金融機関が企業の株式を保有することを指します。機関投資家の株式保有状況は、市場の信頼度や企業の健全性を示す指標とされています。この動画では、ARMの機関所有状況が分析されており、これは投資家にとって重要な参考情報です。

💡Stock Valuation

株式評価とは、企業の株式の価値を定量的に評価することを指します。これには、将来の利益や現金流量を予測し、それに基づいて株式の適正な価格を算定することが含まれます。この動画では、ARMの株式評価が行われており、これは投資家が株式を購入する際の重要な判断材料です。

💡Discounted Cash Flow (DCF)

ディスカウントドキャッシュフロー（DCF）は、将来の現金流量を現在の価値に換算する方法です。これは、企業の成長予測やリスクを考慮して、株式の内在価値を算定する際に使用されます。この動画では、ARMのDCFモデルに基づく株式評価が行われており、これは投資家が株式の購入決定を行う際の重要な分析ツールです。

Highlights

Nvidia's failed attempt to acquire ARM for $40 billion in 2020 due to regulatory issues.

ARM's recent stake acquisition by Nvidia worth $147 million.

ARM's strong performance since its IPO, with a 77.4% increase just this year.

ARM's market cap is around $137 billion, significantly smaller than Nvidia's $2 trillion.

ARM's top line growth has been inconsistent, with a flat growth from March 22 to March 23.

ARM's bottom line growth is inconsistent and questionable given the high trading price.

ARM holds $1.6 billion in cash and has a relatively small total debt of $221 million.

No insider buying or selling has occurred over the last 12 months.

Institutional ownership shows a net increase in buying, with $2.6 billion in purchases over the last 12 months.

ARM's Q3 FY24 shows a 14% increase in top line year on year, with licensing and other revenue up 18%.

ARM's trailing 12 months free cash flow is up 63% year on year.

ARM's sales growth in 2022 was 33%, with a slight drop in 2023, but expectations for 2024 are positive.

ARM's return on invested capital (ROIC) has been double digits year on year for the last two years.

ARM's operating margin has been increasing over the last few years.

ARM's free cash flow margin is strong at 24%, though it has dropped from 53%.

ARM's net debt to EBITDA ratio shows strong balance sheet strength, with the ability to pay off all debt in less than a day.

The intrinsic value of ARM, based on a conservative 35% growth forecast, is around $117, indicating overvaluation.

Wall Street's 12-month price target for ARM is $100, suggesting a -32% upside, which is unusually low for the industry.

Transcripts

Nvidia failed in its attempts to buy ARM

Holding for 40 billion in 2020 due to

regulation issues however over the last

few weeks we can see they now have a

stake worth 147 million in this company

let's find out whether or not this is a

company we should be looking to add with

the boom of artificial intelligence it

has been on a very strong run since its

IPO last year we're going to take a look

of a lot of information we're going to

look at their latest earning with their

revenues up 14% we'll also look at their

top line over the last few years to see

whether or not both Top Line and bottom

line are increasing the way we would

expect we're also look at the health of

the company their total cash versus

their total debt and we'll see exactly

how well they've performed versus some

of their competitors over the last few

years we'll also run it through the

screener for Insider buys and Insider

sales over the last few months and we'll

look to the institutions to see whether

or not they are increasing their

position within their own portfolios and

don't forget we will take a look at some

of their financial metrics to see

whether or not this is in line with what

we expect from a very strong AI company

as always we will run it into the stock

valuation model getting to the intrinsic

value as well as our acceptable Buy

price given that investor margin of

safety and look towards Wall Street to

see their expectations over the next 12

months take a look here for a little

brief narration essentially what arm do

is they are architect develop and

license these high performance lowcost

efficient IP which is their intellectual

property for the CPUs the gpus and npus

so ultimately what this company does is

license as we can see the instruction

set for these chips to their Partners

who ultimately make these chips with any

customizations that they want for their

own unique application 70% of the

world's population used arm-based

products over 280 billion of these chips

have been shipped 99% of these

smartphones run on These Arm based

processors so ultimately you will have

this in your phone and we can see 50% of

all chips with processors are Arm based

so a lot of uses throughout the world

right now and what we want to have a

very quick look at is the company now

since its IPO up

77.4% in fact that is just from this

year and over the last year we can see

around $51 in its IPO of September 2023

nearly tripled from that so very very

strong performance if you have bought

since that point it is trading near that

52 we high but it does have an extremely

high P which we'll touch upon and its

forward earnings per share is $120

something just understand the market cap

is around 137 billion so a lot smaller

than Nvidia which sits at nearly 2

trillion in terms of their top line as

always whilst we do look for 3 to 7%

growth year on-ear for companies with

these large tech companies companies

around the artificial intelligence boom

we are seeing a very very large increase

March 21 then 2 billion on their Top

Line March 22 2.7 billion and what we

note here is in March 23 2.7 billion so

we can see in fact from March 22 to

March 23 it was pretty flat but we are

expecting their full March 24 report

fairly soon and just based on the

trailing 12 months whilst we do see an

increase from 2023 it isn't as rapid as

what we saw when we took a look at

Nvidia in terms of their bottom line

what we can see again 388 million in

2021 nice growth to 2022 of 549 million

but when we see that drop into 2023 it

is a bit questionable given how high

this company is trading at and how

quickly that share price is growing in

terms of the trading 12 months well we

do expect a drop to their bottom line

based on this information when we get

the full annual put we will break it

down but what we can see is their bottom

line is very inconsistent that doesn't

necessarily follow their Top Line in

terms of a quick health check then total

cash versus total debt 1.6 billion of

cash in 2022 2.4 billion from their

latest report so whilst they do hold a

fair amount of cash this has increased

over the last few years and when we

compare this to their total debt

numerically and directionally we can see

in fact it is pretty small

261 it did drop slightly as well to 221

million so they do hold a lot more cash

than they do total debt so no worries

there especially when we look at that

net debt to ebit diametric in terms of

their performance well over the last

year bearing in mind they did recently

IPO they are up

188% which as we can see is an

incredibly strong performance far out

performing the second best which we have

here is Intel up 71% which will surprise

a lot of people given they did have a

dividend cut last year so as always they

have had a very strong performance but

do bear in mind past performance isn't

an indicator of future now taking a look

at the inside of buys and sells what we

typically do run it through all

transaction types buys and sells minimum

100 shares now we've had to go over the

last year just to be transparent and

show that over those last 12 months

there has been no Insider buying as well

as no Insider selling what about the

institutional ownership well that sits

at around 170 in terms of the number of

buyers 186 Million worth of sales by

these institutions over the last 12

months but we see a lot more buying 2.6

billion over the same period so again we

can see institutions do love this stock

a lot more than they don't Q3 their

largest Buy in fact there were no sells

given that it had just ipoed 1.5 billion

and even in their latest quarter whilst

we do see some selling of 186 million a

lot more buying 1.1 billion so again

just remember just because these

institutions are buying a lot of shares

of these companies do not fall into the

Trap of just copying and always always

do your own due diligence now in terms

of just some things we want to point out

in terms of their quarter three

highlights for FY 24 their top line is

up 14% year on year which is positive

their licensing and other Revenue as

part of that is up 18% royalty Revenue

up 11% so we are seeing some nice double

digit growth but do bear in mind that

share price has rocketed up and we are

seeing only low double digigit growth

something just to bear in mind one thing

that is very very nice to see is their

trailing 12 months free cash flow up 63%

year on-ear and you know how important

that free cash flow is if you're a

regular member of this channel it is one

of those that we do think is very key

now the other thing that we just wanted

to point out within this select guide

and you can obviously obtain that just

by going on their website is that that

quarter Revenue year on year now if you

have watched our Nvidia report and

review you will notice their quarterly

increase is something to behold very

very strong especially over the last few

quarters with ARM Holding just bear in

mind they're quarteron quarter we don't

even see increases every year for

example q1 to Q2 last year so just bear

that in mind in fact from Q2 to Q3 there

isn't a very large movement so when you

are looking at your investment thesis

that we will come on to especially for

that stock valuation do bear these in

mind when we're looking at the

forward-looking numbers in terms of the

next 5 to 10 years so let's jump into

some of their metrics now before we take

a look at this just to let you know we

have released our latest free Weekly

Newsletter article if you want to grab a

copy of this and have access to these

other articles which are completely free

do click on that pin comment below now

the free cash flow is one that we all

draw your attention to earnings always

susceptible to manipulation by

management through accounting what we

want to show here is in 2021 it was

pretty high

$14 now it did decrease in 2022 however

we have seen it bounced back up nicely

in 2023 to 63 C and they are expecting a

50% % increase to their free cash flow

over the next 12 months with

expectations of around 93 C now keep

that in mind as we will be using and

talking about some of those figures when

looking at the valuation in terms of the

sales growth well 2022 33% very solid

and as we mentioned they did have a

slight drop in 2023 of around 1% but

2024 they are expecting some nice

increases given Q3 that we just went

through was up around 11 to 18% so again

it is a little a little bit inconsistent

for a company that has rocked it up but

then some could argue that it was

already undervalued at the IPO stage and

again we'll take a look at that when we

take a look at the valuation numbers

total sales then 2 billion in 2021 2.7

billion in 2023 so it is increasing but

again we can clearly see that

inconsistency of a little drop from year

on-year movement shares outstanding then

always we like to see share BuyBacks

returning excess cash to investor

Pockets unfortunately over the last few

years they have in fact issued shares so

your position would be diluted but very

minimal and when you compare this to the

share price return as a shareholder you

probably wouldn't be worry too much but

again do bear in mind given it just

ipoed you would have just seen the

increase from 1.03 to 1.04 over the last

12 months roic what I want to see here

is a minimum 10% to Give Me Faith that

management are able to effectively

allocate their Capital nice to note

double digits year on year over the last

two years looking very solid and this is

something I would want to see maintain

over the next few years especially given

that price that we're about to discuss

operating margin nice to note it has

been increasing over the last few years

always nice to know operational

efficiency by Management on the free

cash flow margin very strong even at

that 24% level which is a little bit of

a drop from that 53% so even though we

see that very very strong we want to see

here a minimum of around 12% so nice to

note that very high double digigit

number finally the net debt ebit Dar so

earnings before interest tax depreciate

ation ammortization as always this gives

us the faith around the dividend safety

given they don't currently pay a

dividend this essentially shows us the

balance sheet strength so what we're

saying here is in fact it wouldn't take

them even one day to pay off all of

their debt net of cash on hand in 2023

or 2022 and the same for 2024 expected

so looking very positive in some of

these metrics so let's get into the main

part of this which is the valuation as

always if you do enjoy the content value

is being provided smash that like button

hit that subscribe and Bell button so

you are continually notified of these

videos as they drop now typically we

would run through every single one of

these models on the show when we do our

deep Dives however given they aren't all

relevant to um we're going to jump

straight into the discounted cash flow

now as they have just IPO we only have

this information that we screen on

screen available to us the average

growth around 59% this is again just

using one year's data moving forward for

next year analysts are expecting and the

management around 50 % so what we've

done here is we've gone lower than the

average which is purely the year-on-year

increase we've gone lower than the

expectation of 50% and we've gone around

35% Now using that we get the present

value of the future free cash flows

alongside that discount rate we've added

that to the cash subtracted total debt

got to the equity value divided by

shares outstanding and we can see based

on this we get an intrinsic value of

around

$117 which is a sign of overvaluation

now just if we did use what management

work expecting over the next year or 50%

we would be looking at a price which is

nearly twice the current value but you

do need to bear in mind we are

forecasting out in the future for at

least 10 years so if you were expecting

50% your thesis would have to be 50%

over the next 10 years at a minimum

again we have been conservative in what

we believe at around that 35% Mark so

again we do see that essential

overvaluation sign so in today's episode

as we mentioned the intrinsic value is

purely just the DCF price which comes to

$117 don't forget you can grab a copy of

this valuation model to get to the

intrinsic value and acceptable Buy price

of companies in your own portfolio by

clicking on that pinned comment below

margin of safety as always then we use a

starting point of 10% if we believe it

has a wide mode strong financial metrics

and good forward-looking data for arm we

would be looking at around $115 for that

10% margin of safety and we can see when

looking at that trading price that is

still within that 52 week range so we

see right now the intrinsic value is

significantly below that current price

of

$147 again people will be looking for

even a 20% margin of safety of $93 and

if you're looking around 25% around 88

in terms of Wall Street and what they

forecast over the next 12 months well

they have a price target of $100 and

they basically see upside of - 32% they

do believe that arm Holdings is

currently extremely overvalued and in

fact on this channel we have done many

videos reviewing companies this is

ultimately the worst upside we have seen

so again do take it with a pinch of soul

in terms of Wall Street forecast if a

company starts to do better they do

start to tend to increase their

forecasted price so always do your own

due diligence as always let us know your

thoughts in the comments below whether

or not ARM Holding is one that you're

looking to add to or maybe you added

towards their IPO price around the $60

Mark as always you can also check out

our in-depth review of Nvidia that we

did just yesterday and don't forget

smash that like button if you enjoyed

today episode hit that subscribe and

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and as always catch you on the next one