If I had $20B in private equity money, would I buy ARMH with its $260 ttm net income? This equates to 1.3% return on investment. The current valuation is short of insane. There is of course potential for growth but ARMH would have to quadruple its revenue to be even close to its current valuation, and the cost of money in the meantime would eat up any upside. IMHO this will eventually go down to a more reasonable valuation.
Revenue is only 1B with 99.9% share of the mobile market. This stock price includes windows RT which has failed and is leaning toward the PRO version with intel, and a push into servers which still hasn't progressed as expected. But even if it were to get 30% of the server market from ~0 now, how much would revenue go up? I don't think much based on revenue of mobile products now due to the business model which keeps ARMH from the risk of inventory but at the same time also keeps it from higher revenue and profits. I'm short through options and i like the company and the technology but revenue will never catch up to the stock price.
Same here I'm long puts. The company is great and it's technology is great. But it's stock value is ridiculous. And yes I agree licensing puts real limits on revenue growth. I can't imagine the kind of revenue growth that's priced into this right now.