ARM vs. IBM: A Head-to-Head Stock Comparison
UpdatedHere’s a clear look at ARM and IBM, comparing key factors like performance, valuation metrics, dividends, and financial strength. It’s built for investors or anyone curious to see how these two stocks match up.
Company Overview
IBM towers over ARM with a market cap of 242.45 billion USD, roughly 1.76 times the 137.89 billion USD of its peer.
ARM rides a wilder wave with a beta of 4.41, hinting at bigger swings than IBM’s steadier 0.63.
Worth noting: ARM flies the ADR flag, tying it to a foreign outfit on U.S. soil, while IBM sticks to plain-vanilla U.S. listing.
| Symbol | ARM | IBM |
|---|---|---|
| Company Name | Arm Holdings plc American Depositary Shares | International Business Machines Corporation |
| Country | GB | US |
| Sector | Technology | Technology |
| Industry | Semiconductors | Information Technology Services |
| CEO | Mr. Rene Anthony Andrada Haas | Mr. Arvind Krishna |
| Price | 130.45 USD | 260.87 USD |
| Market Cap | 137.89 billion USD | 242.45 billion USD |
| Beta | 4.407467 | 0.629 |
| Exchange | NASDAQ | NYSE |
| IPO Date | September 14, 2023 | September 24, 1915 |
| ADR | Yes | No |
Performance Comparison
This chart compares the performance of ARM and IBM over the past year by tracking the growth of an initial $10,000 investment in each (starting one year ago).
Hover over the lines to see the investment’s value and total return (%) at specific dates.
Data is adjusted for dividends and splits.
Valuation Metrics Comparison
The section examines key financial ratios to assess the valuation of ARM and IBM based on earnings, cash flow, sales, and book value. Pay attention to the following notable points where extreme values stand out.
- ARM stands out with a P/E of 170.26, far exceeding conventional benchmarks. This elevated figure means its stock price is disproportionately large compared to its earnings over the past twelve months, often reflecting strong investor optimism about its future. Meanwhile, IBM at 44.23 aligns with more typical earnings multiples.
| Symbol | ARM | IBM |
|---|---|---|
| Price-to-Earnings Ratio (P/E, TTM) | 170.26 | 44.23 |
| Forward PEG Ratio (TTM) | 6.09 | 8.51 |
| Price-to-Sales Ratio (P/S, TTM) | 37.33 | 3.86 |
| Price-to-Book Ratio (P/B, TTM) | 21.38 | 9.01 |
| Price-to-Free Cash Flow Ratio (P/FCF, TTM) | 220.26 | 20.31 |
| EV-to-EBITDA (TTM) | 221.33 | 24.19 |
| EV-to-Sales (TTM) | 36.85 | 4.75 |
| EV-to-Free Cash Flow (TTM) | 217.45 | 24.98 |
Dividend Comparison
ARM pays no dividends, focusing all profits on growth, appealing to capital-gains investors. Meanwhile, IBM’s 2.56% yield rewards shareholders, showing financial confidence while supporting objectives—a contrast to ARM’s growth-only approach.
| Symbol | ARM | IBM |
|---|---|---|
| Dividend Yield (TTM) | 0.00% | 2.56% |
Financial Strength Metrics Comparison
This section dives into the financial resilience of ARM and IBM, spotlighting key metrics like liquidity, leverage, and debt coverage. Check out the standout observations below where notable differences or extremes pop up.
- ARM posts an interest coverage of “--”, hinting at interest costs so low they’re negligible—often from scant debt or dirt-cheap rates—while IBM at 5.92 handles interest with solid earnings.
| Symbol | ARM | IBM |
|---|---|---|
| Current Ratio (TTM) | 4.96 | 1.01 |
| Quick Ratio (TTM) | 4.96 | 0.97 |
| Debt-to-Equity Ratio (TTM) | 0.04 | 2.49 |
| Debt-to-Assets Ratio (TTM) | 0.03 | 0.46 |
| Interest Coverage Ratio (TTM) | -- | 5.92 |