ARM vs. MSI: A Head-to-Head Stock Comparison

Updated on July 7, 2025

Here’s a clear look at ARM and MSI, comparing key factors like historical performance, profitability, financial strength, growth, dividend, and valuation.

Company Overview

ARM’s market capitalization of 163.93 billion USD is substantially larger than MSI’s 70.91 billion USD, indicating a significant difference in their market valuations.

ARM’s beta of 4.10 points to significantly higher volatility compared to MSI (beta: 0.97), suggesting ARM has greater potential for both gains and losses relative to market movements.

ARM trades as an American Depositary Receipt (ADR), offering U.S. investors a convenient way to access its foreign-listed shares. In contrast, MSI is a standard domestic listing.

Symbol	ARM	MSI
Company Name	Arm Holdings plc American Depositary Shares	Motorola Solutions, Inc.
Country	GB	US
Sector	Technology	Technology
Industry	Semiconductors	Communication Equipment
CEO	Rene Anthony Andrada Haas	Gregory Q. Brown
Price	155.09 USD	424.84 USD
Market Cap	163.93 billion USD	70.91 billion USD
Beta	4.10	0.97
Exchange	NASDAQ	NYSE
IPO Date	September 14, 2023	March 17, 1980
ADR	Yes	No

Historical Performance

This chart compares the performance of ARM and MSI 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.

ARM vs. MSI: Growth of a $10,000 investment over the past one year.

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.

MSI

149.56%

Communication Equipment Industry

Max: 30.07%
Q3: 8.07%
Median: 1.84%
Q1: -11.93%
Min: -31.65%

MSI’s Return on Equity of 149.56% is exceptionally high, placing it well beyond the typical range for the Communication Equipment industry. This demonstrates a superior ability to generate profit from shareholder investments, though it could also be inflated by high financial leverage.

ARM vs. MSI: A comparison of their ROE against their respective Semiconductors and Communication Equipment industry benchmarks.

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.

MSI

22.82%

Communication Equipment Industry

Max: 11.59%
Q3: 6.61%
Median: 2.97%
Q1: -2.58%
Min: -13.18%

MSI’s Return on Invested Capital of 22.82% is exceptionally high, placing it well beyond the typical range for the Communication Equipment industry. This demonstrates an outstanding ability to deploy capital efficiently and create significant value.

ARM vs. MSI: A comparison of their ROIC against their respective Semiconductors and Communication Equipment industry benchmarks.

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.

MSI

18.67%

Communication Equipment Industry

Max: 23.65%
Q3: 9.21%
Median: 2.46%
Q1: -8.56%
Min: -29.87%

A Net Profit Margin of 18.67% places MSI in the upper quartile for the Communication Equipment industry, signifying strong profitability and more effective cost management than most of its peers.

ARM vs. MSI: A comparison of their Net Profit Margin against their respective Semiconductors and Communication Equipment industry benchmarks.

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.

MSI

25.20%

Communication Equipment Industry

Max: 30.72%
Q3: 11.64%
Median: 5.79%
Q1: -2.28%
Min: -18.20%

An Operating Profit Margin of 25.20% places MSI in the upper quartile for the Communication Equipment industry. This signals a strong ability to translate revenue into operating profit, outperforming most of its competitors in core business efficiency.

ARM vs. MSI: A comparison of their Operating Margin against their respective Semiconductors and Communication Equipment industry benchmarks.

Profitability at a Glance

Symbol	ARM	MSI
Return on Equity (TTM)	12.71%	149.56%
Return on Assets (TTM)	8.87%	14.18%
Return on Invested Capital (TTM)	11.37%	22.82%
Net Profit Margin (TTM)	19.77%	18.67%
Operating Profit Margin (TTM)	20.74%	25.20%
Gross Profit Margin (TTM)	95.83%	50.97%

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.

MSI

1.20

Communication Equipment Industry

Max: 3.40
Q3: 2.59
Median: 1.62
Q1: 1.32
Min: 0.86

MSI’s Current Ratio of 1.20 falls into the lower quartile for the Communication Equipment industry. This indicates a tighter liquidity situation and a more constrained capacity to handle short-term debt than many of its competitors.

ARM vs. MSI: A comparison of their Current Ratio against their respective Semiconductors and Communication Equipment industry benchmarks.

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.

MSI

3.98

Communication Equipment Industry

Max: 1.82
Q3: 1.00
Median: 0.53
Q1: 0.20
Min: 0.02

With a Debt-to-Equity Ratio of 3.98, MSI operates with exceptionally high leverage compared to the Communication Equipment industry norm. This suggests an aggressive reliance on debt financing, which can magnify returns but also significantly elevates financial risk.

ARM vs. MSI: A comparison of their D/E Ratio against their respective Semiconductors and Communication Equipment industry benchmarks.

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.

MSI

11.80

Communication Equipment Industry

Max: 16.12
Q3: 9.22
Median: 2.52
Q1: -0.75
Min: -12.07

MSI’s Interest Coverage Ratio of 11.80 is in the upper quartile for the Communication Equipment industry, signifying a strong and healthy capacity to meet its interest payments from operating profits.

ARM vs. MSI: A comparison of their Interest Coverage against their respective Semiconductors and Communication Equipment industry benchmarks.

Financial Strength at a Glance

Symbol	ARM	MSI
Current Ratio (TTM)	5.20	1.20
Quick Ratio (TTM)	5.20	1.03
Debt-to-Equity Ratio (TTM)	0.05	3.98
Debt-to-Asset Ratio (TTM)	0.04	0.45
Net Debt-to-EBITDA Ratio (TTM)	-2.31	1.57
Interest Coverage Ratio (TTM)	--	11.80

Growth

The following charts compare key year-over-year (YoY) growth metrics for ARM and MSI. These metrics are based on the companies’ annual financial reports.

Revenue Growth

ARM vs. MSI: A comparison of their annual year-over-year Revenue Growth.

Earnings Per Share (EPS) Growth

ARM vs. MSI: A comparison of their annual year-over-year Earnings Per Share (EPS) Growth.

Free Cash Flow Growth

ARM vs. MSI: A comparison of their annual year-over-year 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.

MSI

1.00%

Communication Equipment Industry

Max: 4.72%
Q3: 0.38%
Median: 0.00%
Q1: 0.00%
Min: 0.00%

With a Dividend Yield of 1.00%, MSI offers a more attractive income stream than most of its peers in the Communication Equipment industry, signaling a strong commitment to shareholder returns.

ARM vs. MSI: A comparison of their Dividend Yield against their respective Semiconductors and Communication Equipment industry benchmarks.

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.

MSI

32.89%

Communication Equipment Industry

Max: 91.96%
Q3: 26.44%
Median: 0.00%
Q1: 0.00%
Min: 0.00%

MSI’s Dividend Payout Ratio of 32.89% is in the upper quartile for the Communication Equipment industry. This indicates a strong commitment to shareholder returns but also suggests that a smaller portion of earnings is retained for reinvestment compared to many peers.

ARM vs. MSI: A comparison of their Payout Ratio against their respective Semiconductors and Communication Equipment industry benchmarks.

Dividend at a Glance

Symbol	ARM	MSI
Dividend Yield (TTM)	0.00%	1.00%
Dividend Payout Ratio (TTM)	0.00%	32.89%

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.

MSI

34.66

Communication Equipment Industry

Max: 44.37
Q3: 41.98
Median: 30.61
Q1: 23.44
Min: 2.14

MSI’s P/E Ratio of 34.66 is within the middle range for the Communication Equipment industry. This suggests its valuation is in line with the sector average, representing neither a significant premium nor a discount compared to its peers.

ARM vs. MSI: A comparison of their P/E Ratio against their respective Semiconductors and Communication Equipment industry benchmarks.

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.

MSI

4.11

Communication Equipment Industry

Max: 15.97
Q3: 6.99
Median: 2.78
Q1: 0.66
Min: 0.05

The Forward PEG Ratio is often not a primary valuation metric in the Communication Equipment industry.

ARM vs. MSI: A comparison of their Forward PEG Ratio against their respective Semiconductors and Communication Equipment industry benchmarks.

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.

MSI

6.47

Communication Equipment Industry

Max: 6.38
Q3: 3.88
Median: 2.17
Q1: 1.15
Min: 0.37

With a P/S Ratio of 6.47, MSI trades at a valuation that eclipses even the highest in the Communication Equipment industry. This implies the market has priced in exceptionally optimistic scenarios for future revenue growth, posing considerable valuation risk.

ARM vs. MSI: A comparison of their P/S Ratio against their respective Semiconductors and Communication Equipment industry benchmarks.

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.

MSI

43.21

Communication Equipment Industry

Max: 14.42
Q3: 7.01
Median: 3.09
Q1: 1.38
Min: 0.41

At 43.21, MSI’s P/B Ratio is at an extreme premium to the Communication Equipment 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.

ARM vs. MSI: A comparison of their P/B Ratio against their respective Semiconductors and Communication Equipment industry benchmarks.

Valuation at a Glance

Symbol	ARM	MSI
Price-to-Earnings Ratio (P/E, TTM)	206.59	34.66
Forward PEG Ratio (TTM)	7.75	4.11
Price-to-Sales Ratio (P/S, TTM)	40.91	6.47
Price-to-Book Ratio (P/B, TTM)	23.92	43.21
Price-to-Free Cash Flow Ratio (P/FCF, TTM)	1011.91	31.23
EV-to-EBITDA (TTM)	216.85	24.03
EV-to-Sales (TTM)	40.48	6.92