ARM Stock Forecast & Price Target

ARM Holdings is projected to experience robust revenue growth of 24% annually, reaching approximately $3.99 billion by 2025, with estimated earnings per share (EPS) soaring by 345% year-over-year to $1.60. The company's royalty revenue has demonstrated strong performance, growing 23% year-on-year due to increased adoption of its v9 architecture and notable contributions from its Compute Sub-System platform, particularly in high-profile smartphone designs. Additionally, ARM anticipates a record revenue in Q4, driven by a 32% annual increase fueled by strong growth in both royalty and license revenues, reflecting a successful strategy in securing significant deals before the fiscal year's end.

ARM Holdings has reported a slight decline in remaining performance obligations (RPO), from $2.4 billion to $2.3 billion, indicating potential volatility in future revenue streams. The company anticipates a decline in royalty revenues due to seasonal factors within the smartphone market and a pullback in IoT revenues, despite some offsetting gains from record licensing revenue driven by renewals. Additionally, stagnation in Armv9 revenue contribution, remaining at 25% for three consecutive quarters, suggests challenges in achieving profitability and growth, particularly amidst an increasingly saturated and maturing customer base in the mobile device segment.