We Remain Cautious after ARM's In-Line Quarter

ARM Holdings remains in an eviable position as IP provider but we're exercising caution over its prospects in the PC market

Brian Colello, CPA 27 July, 2011 | 3:43PM
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ARM Holdings (ARM) reported second-quarter earnings and gave investors a third-quarter outlook that was consistent with our expectations. Looking ahead to the second half of the year, ARM hinted that revenue would be in line with current market expectations, which implies decent sales growth in the coming months. The firm admitted, however, that its visibility into the fourth quarter is a bit cloudy, and that current consensus estimates are a bit aggressive. We continue to believe that ARM will generate robust revenue growth in the years ahead, but we also don't see the stock as attractively valued today.

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Brian Colello, CPA  is a senior stock analyst with Morningstar.

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