Chip designer ARM Holdings plc (NASDAQ: ARMH) posted revenues of $217.4 million for the company’s fourth quarter, handily beating the consensus estimate of $193.4 million. Adjusted net income also soared past expectations, coming in at $109 million versus a consensus estimate of $88.1 million.
The company licenses its designs to mobile device makers like Apple Inc. (NASDAQ: AAPL) as well as to companies that make chips for embedded applications. ARM is expected to face stiffer competition from Intel Corp. (NASDAQ: INTC) going forward, following Intel’s announcement of a new low-power chip.
ARM’s potential upside is about 18%, based on a consensus target price of $33.75 and a price this morning of $29.63. But its forward P/E ratio of nearly 50 indicates that there are high expectations for the stock — expectations that could be hard to meet given fresh competition from Intel.
Shares are up about 4% this morning at $29.63 in a 52-week range of $22.10-$32.18.
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