ARM vs. GDS: A Head-to-Head Stock Comparison
Updated onHere’s a clear look at ARM and GDS, comparing key factors like historical performance, profitability, financial strength, growth, dividend, and valuation.
Company Overview
ARM’s market capitalization stands at 163.93 billion USD, while GDS’s is 140.20 billion USD, indicating their market valuations are broadly comparable.
ARM’s beta of 4.10 points to significantly higher volatility compared to GDS (beta: 0.23), suggesting ARM has greater potential for both gains and losses relative to market movements.
ARM and GDS are both American Depositary Receipts (ADRs). This provides U.S. investors with straightforward access to investing in these foreign-listed companies without directly engaging with overseas stock exchanges.
| Symbol | ARM | GDS |
|---|---|---|
| Company Name | Arm Holdings plc American Depositary Shares | GDS Holdings Limited |
| Country | GB | CN |
| Sector | Technology | Technology |
| Industry | Semiconductors | Information Technology Services |
| CEO | Rene Anthony Andrada Haas | Wei Huang |
| Price | 155.09 USD | 33.98 USD |
| Market Cap | 163.93 billion USD | 140.20 billion USD |
| Beta | 4.10 | 0.23 |
| Exchange | NASDAQ | NASDAQ |
| IPO Date | September 14, 2023 | November 2, 2016 |
| ADR | Yes | Yes |
Historical Performance
This chart compares the performance of ARM and GDS by tracking the growth of an initial $10,000 investment in each. Use the tabs to select the desired time period.
Data is adjusted for dividends and splits.
Profitability
Return on Equity
ARM
12.71%
Semiconductors Industry
- Max
- 41.84%
- Q3
- 15.81%
- Median
- 6.31%
- Q1
- -5.54%
- Min
- -30.12%
ARM’s Return on Equity of 12.71% is on par with the norm for the Semiconductors industry, indicating its profitability relative to shareholder equity is typical for the sector.
GDS
16.65%
Information Technology Services Industry
- Max
- 47.24%
- Q3
- 23.27%
- Median
- 12.85%
- Q1
- 2.22%
- Min
- -26.63%
GDS’s Return on Equity of 16.65% is on par with the norm for the Information Technology Services industry, indicating its profitability relative to shareholder equity is typical for the sector.
Return on Invested Capital
ARM
11.37%
Semiconductors Industry
- Max
- 30.91%
- Q3
- 11.34%
- Median
- 4.08%
- Q1
- -2.17%
- Min
- -19.59%
In the upper quartile for the Semiconductors industry, ARM’s Return on Invested Capital of 11.37% signifies a highly effective use of its capital to generate profits when compared to its peers.
GDS
1.92%
Information Technology Services Industry
- Max
- 28.29%
- Q3
- 13.19%
- Median
- 7.24%
- Q1
- 0.23%
- Min
- -18.82%
GDS’s Return on Invested Capital of 1.92% is in line with the norm for the Information Technology Services industry, reflecting a standard level of efficiency in generating profits from its capital base.
Net Profit Margin
ARM
19.77%
Semiconductors Industry
- Max
- 51.69%
- Q3
- 19.67%
- Median
- 8.56%
- Q1
- -5.44%
- Min
- -38.60%
A Net Profit Margin of 19.77% places ARM in the upper quartile for the Semiconductors industry, signifying strong profitability and more effective cost management than most of its peers.
GDS
30.83%
Information Technology Services Industry
- Max
- 20.47%
- Q3
- 11.62%
- Median
- 5.97%
- Q1
- 1.89%
- Min
- -4.62%
GDS’s Net Profit Margin of 30.83% is exceptionally high, placing it well beyond the typical range for the Information Technology Services industry. This demonstrates outstanding operational efficiency and a strong competitive advantage in converting revenue into profit.
Operating Profit Margin
ARM
20.74%
Semiconductors Industry
- Max
- 58.03%
- Q3
- 22.12%
- Median
- 8.40%
- Q1
- -3.73%
- Min
- -36.14%
ARM’s Operating Profit Margin of 20.74% is around the midpoint for the Semiconductors industry, indicating that its efficiency in managing core business operations is typical for the sector.
GDS
10.23%
Information Technology Services Industry
- Max
- 29.42%
- Q3
- 14.75%
- Median
- 8.92%
- Q1
- 2.62%
- Min
- -11.92%
GDS’s Operating Profit Margin of 10.23% is around the midpoint for the Information Technology Services industry, indicating that its efficiency in managing core business operations is typical for the sector.
Profitability at a Glance
| Symbol | ARM | GDS |
|---|---|---|
| Return on Equity (TTM) | 12.71% | 16.65% |
| Return on Assets (TTM) | 8.87% | 4.65% |
| Return on Invested Capital (TTM) | 11.37% | 1.92% |
| Net Profit Margin (TTM) | 19.77% | 30.83% |
| Operating Profit Margin (TTM) | 20.74% | 10.23% |
| Gross Profit Margin (TTM) | 95.83% | 22.02% |
Financial Strength
Current Ratio
ARM
5.20
Semiconductors Industry
- Max
- 9.10
- Q3
- 5.23
- Median
- 3.09
- Q1
- 2.49
- Min
- 1.02
ARM’s Current Ratio of 5.20 aligns with the median group of the Semiconductors industry, indicating that its short-term liquidity is in line with its sector peers.
GDS
1.28
Information Technology Services Industry
- Max
- 3.41
- Q3
- 2.37
- Median
- 1.58
- Q1
- 1.20
- Min
- 0.00
GDS’s Current Ratio of 1.28 aligns with the median group of the Information Technology Services industry, indicating that its short-term liquidity is in line with its sector peers.
Debt-to-Equity Ratio
ARM
0.05
Semiconductors Industry
- Max
- 0.97
- Q3
- 0.46
- Median
- 0.21
- Q1
- 0.05
- Min
- 0.00
ARM’s Debt-to-Equity Ratio of 0.05 is typical for the Semiconductors industry, indicating its use of leverage is in line with the sector norm. This suggests a balanced approach to its capital structure.
GDS
1.89
Information Technology Services Industry
- Max
- 2.63
- Q3
- 1.16
- Median
- 0.48
- Q1
- 0.09
- Min
- 0.01
GDS’s leverage is in the upper quartile of the Information Technology Services industry, with a Debt-to-Equity Ratio of 1.89. While this approach can boost equity growth, it also exposes the company to greater financial vulnerability.
Interest Coverage Ratio
ARM
--
Semiconductors Industry
- Max
- 36.25
- Q3
- 29.12
- Median
- 7.01
- Q1
- -1.22
- Min
- -18.18
Interest Coverage Ratio data for ARM is currently unavailable.
GDS
0.74
Information Technology Services Industry
- Max
- 17.52
- Q3
- 10.04
- Median
- 4.66
- Q1
- 0.80
- Min
- -10.50
GDS’s Interest Coverage Ratio of 0.74 is a critical concern. A value below 1.0 means operating earnings are insufficient to cover interest expenses, indicating severe financial strain and high default risk.
Financial Strength at a Glance
| Symbol | ARM | GDS |
|---|---|---|
| Current Ratio (TTM) | 5.20 | 1.28 |
| Quick Ratio (TTM) | 5.20 | 1.28 |
| Debt-to-Equity Ratio (TTM) | 0.05 | 1.89 |
| Debt-to-Asset Ratio (TTM) | 0.04 | 0.60 |
| Net Debt-to-EBITDA Ratio (TTM) | -2.31 | 7.92 |
| Interest Coverage Ratio (TTM) | -- | 0.74 |
Growth
The following charts compare key year-over-year (YoY) growth metrics for ARM and GDS. These metrics are based on the companies’ annual financial reports.
Revenue Growth
Earnings Per Share (EPS) Growth
Free Cash Flow Growth
Dividend
Dividend Yield
ARM
0.00%
Semiconductors Industry
- Max
- 6.48%
- Q3
- 0.93%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
ARM currently does not pay a dividend, resulting in a yield of 0%. This is a common strategy for growth-focused companies that prioritize reinvesting earnings, though it may be less typical in mature, income-oriented sectors.
GDS
0.00%
Information Technology Services Industry
- Max
- 16.57%
- Q3
- 1.39%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
GDS currently does not pay a dividend, resulting in a yield of 0%. This is a common strategy for growth-focused companies that prioritize reinvesting earnings, though it may be less typical in mature, income-oriented sectors.
Dividend Payout Ratio
ARM
0.00%
Semiconductors Industry
- Max
- 204.29%
- Q3
- 31.85%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
ARM has a Dividend Payout Ratio of 0%, indicating it does not currently pay a dividend. This is a common strategy for growth-oriented companies that reinvest all profits back into the business.
GDS
0.00%
Information Technology Services Industry
- Max
- 112.81%
- Q3
- 20.98%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
GDS has a Dividend Payout Ratio of 0%, indicating it does not currently pay a dividend. This is a common strategy for growth-oriented companies that reinvest all profits back into the business.
Dividend at a Glance
| Symbol | ARM | GDS |
|---|---|---|
| Dividend Yield (TTM) | 0.00% | 0.00% |
| Dividend Payout Ratio (TTM) | 0.00% | 0.00% |
Valuation
Price-to-Earnings Ratio
ARM
206.59
Semiconductors Industry
- Max
- 86.15
- Q3
- 47.38
- Median
- 27.87
- Q1
- 18.89
- Min
- 4.73
At 206.59, ARM’s P/E Ratio is exceptionally high, exceeding the typical maximum for the Semiconductors industry. This suggests the stock may be significantly overvalued compared to its peers and implies high market expectations that could be difficult to meet.
GDS
35.44
Information Technology Services Industry
- Max
- 49.12
- Q3
- 36.91
- Median
- 24.84
- Q1
- 15.88
- Min
- 1.55
GDS’s P/E Ratio of 35.44 is within the middle range for the Information Technology Services industry. This suggests its valuation is in line with the sector average, representing neither a significant premium nor a discount compared to its peers.
Forward P/E to Growth Ratio
ARM
7.75
Semiconductors Industry
- Max
- 4.73
- Q3
- 2.80
- Median
- 1.11
- Q1
- 0.68
- Min
- 0.01
The Forward PEG Ratio is often not a primary valuation metric in the Semiconductors industry.
GDS
28.19
Information Technology Services Industry
- Max
- 5.35
- Q3
- 3.79
- Median
- 2.23
- Q1
- 1.19
- Min
- 0.03
GDS’s Forward PEG Ratio of 28.19 is exceptionally high for the Information Technology Services industry. This suggests its stock price is very high relative to its expected earnings growth, signaling significant overvaluation risk.
Price-to-Sales Ratio
ARM
40.91
Semiconductors Industry
- Max
- 21.96
- Q3
- 10.21
- Median
- 4.45
- Q1
- 2.32
- Min
- 0.48
With a P/S Ratio of 40.91, ARM trades at a valuation that eclipses even the highest in the Semiconductors industry. This implies the market has priced in exceptionally optimistic scenarios for future revenue growth, posing considerable valuation risk.
GDS
4.26
Information Technology Services Industry
- Max
- 8.15
- Q3
- 4.17
- Median
- 2.14
- Q1
- 1.00
- Min
- 0.10
GDS’s P/S Ratio of 4.26 is in the upper echelon for the Information Technology Services industry. This means the company is valued richly on its revenue stream compared to its peers, suggesting the stock is priced for a high level of future performance.
Price-to-Book Ratio
ARM
23.92
Semiconductors Industry
- Max
- 13.12
- Q3
- 6.49
- Median
- 3.31
- Q1
- 1.74
- Min
- 0.23
At 23.92, ARM’s P/B Ratio is at an extreme premium to the Semiconductors industry. This signifies that the market’s valuation is heavily reliant on future potential rather than its current net asset value, which can be a high-risk proposition.
GDS
5.16
Information Technology Services Industry
- Max
- 11.78
- Q3
- 6.14
- Median
- 3.23
- Q1
- 1.97
- Min
- 0.42
The P/B Ratio is often not a primary valuation metric for the Information Technology Services industry.
Valuation at a Glance
| Symbol | ARM | GDS |
|---|---|---|
| Price-to-Earnings Ratio (P/E, TTM) | 206.59 | 35.44 |
| Forward PEG Ratio (TTM) | 7.75 | 28.19 |
| Price-to-Sales Ratio (P/S, TTM) | 40.91 | 4.26 |
| Price-to-Book Ratio (P/B, TTM) | 23.92 | 5.16 |
| Price-to-Free Cash Flow Ratio (P/FCF, TTM) | 1011.91 | -9.58 |
| EV-to-EBITDA (TTM) | 216.85 | 18.16 |
| EV-to-Sales (TTM) | 40.48 | 7.55 |