ARM HoldingsARM -3.17%62 Pretax Margin % is 32.28% as of Mar. 2026, which is 33% above its 10-year median of 24.29. GuruFocus rates ARM with a GF Score™ of 62/100 and a GF Value™ of $177.63 (Significantly Overvalued). The stock has 1 warning sign investors should review. Among 1,023 Semiconductors companies, ARM Holdings ranks better than 85.43% on this metric.
Pre-Tax margin is calculated as Pre-Tax Income divided by its Revenue. ARM Holdings's Pre-Tax Income for the
three
months ended in Mar. 2026 was $481 Mil. ARM Holdings's Revenue for the
three
months ended in Mar. 2026 was $1,490 Mil. Therefore, ARM Holdings's pretax margin for the quarter that ended in Mar. 2026 was 32.28%.
The historical rank and industry rank for ARM Holdings's Pretax Margin % or its related term are showing as below:
ARM'
s Pretax Margin % Range Over the Past 10 Years
Min: 6.56 Med: 24.29 Max: 34.39
Current: 23.52
ARM's Pretax Margin % is ranked better than 85.43% of 1023
companies
in the Semiconductors industry
Industry Median: 5.08
vs ARM: 23.52
ARM Holdings (NAS:ARM) Pretax Margin % Explanation
The pretax margin, as know as pretax profit margin, is widely used to measure the operating efficiency of a company before deducting taxes.
The pretax margin is sometimes preferred over the net margin as tax expenditures can make profitability comparisons between companies misleading.
It is a useful tool to compare companies operating in the same sector and less effective when comparing companies from other sectors as each industry generally has different operating expenses and sales patterns.
The long term trend of the pretax margin is a good indicator of the competitiveness and health of the business.
ARM Holdings Pretax Margin % Related Terms
ARM Holdings Pretax Margin % Historical Data
* Premium members only.
The historical data trend for ARM Holdings's Pretax Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Semiconductors subindustry, ARM Holdings's Pretax Margin %, along with its competitors' market caps and Pretax Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
ARM Holdings Pretax Margin % vs Semiconductors Industry
For the Semiconductors industry and Technology sector, ARM Holdings's Pretax Margin % distribution charts can be found below:
* The bar in red indicates where ARM Holdings's Pretax Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
ARM Holdings (ARM) has a Pretax Margin % of 32.28% as of Mar. 2026. Pre-Tax margin is the ratio of total pre-tax income to net sales. View historical data on ARM Holdings and its competitors. This is 33% above median its historical median of 24.29. Over the past decade, ARM Holdings' Pretax Margin % has ranged from 6.56 to 34.39. According to the industry distribution chart, ARM Holdings ranks #149 out of 1023 companies in the Semiconductors industry, placing it in the top 14.6%.
Is ARM Holdings' Pretax Margin % too high?
ARM Holdings' current Pretax Margin % of 32.28% is 33% above median its 10-year median of 24.29. Over the past 10 years, this metric has ranged from a low of 6.56 to a high of 34.39. The Semiconductors industry median Pretax Margin % is 5.08. ARM Holdings' value of 32.28% is 535.4% above this industry median. Based on the distribution chart, ARM Holdings ranks #149 out of 1023 companies in the Semiconductors industry, which is in the top quartile — a strong position relative to peers. Overall, ARM Holdings has a GF Score™ of 62/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does ARM Holdings' Pretax Margin % compare to TXN and QCOM?
According to the Semiconductors industry distribution chart, ARM Holdings ranks #149 out of 1023 companies for Pretax Margin %. This places ARM Holdings in the top 15% of its industry — outperforming the majority of peers. The industry median Pretax Margin % is 5.08. ARM Holdings' value of 32.28% is 535.4% above this benchmark. Historically, ARM Holdings' own Pretax Margin % has ranged from 6.56 to 34.39 over the past decade. While the company's 10-year median is 24.29 vs. the industry median of 5.08, ARM Holdings has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Pretax Margin % for a Semiconductors company?
The median Pretax Margin % among Semiconductors companies is 5.08, based on 1,023 companies in the industry. Companies in the top quartile (top 25%) have a Pretax Margin % significantly above this median, while those in the bottom quartile fall well below. However, Pretax Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. ARM Holdings's current Pretax Margin % of 32.28% is 535.4% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Pretax Margin % mean?
A high Pretax Margin % can signal that a stock is expensive relative to its fundamentals. Pre-Tax margin is the ratio of total pre-tax income to net sales. View historical data on ARM Holdings and its competitors. For the Semiconductors industry, the median Pretax Margin % is 5.08 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. ARM Holdings's current Pretax Margin % is 32.28%, which is 33% above median its own 10-year median of 24.29. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is ARM Holdings stock overvalued right now?
Based on GuruFocus' analysis, ARM Holdings (ARM) is currently considered Significantly Overvalued. The stock's GF Value™ is $177.63, compared to a current price of $347.71 — trading 95.7% above its estimated fair value. The current Pretax Margin % is 32.28%, which is 33% above median its 10-year median of 24.29 and 535.4% above the Semiconductors industry median of 5.08. ARM Holdings' overall GF Score™ is 62/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Pretax Margin % calculated?
Pretax Margin % is calculated from a company's financial statements. For ARM Holdings (ARM), the current Pretax Margin % is 32.28% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is ARM Holdings (ARM) Overvalued in 2026?
Based on GuruFocus' analysis, ARM Holdings stock appears to be overvalued.
The current stock price of $347.71 is trading 95.7% above its estimated GF Value™ of $177.63.
GuruFocus considers ARM Holdings to be Significantly Overvalued.
Key valuation signals for ARM:
Pretax Margin %: 32.28% (33% above median its 10-year median of 24.29)
GF Value™: $177.63 vs. price of $347.71 (95.7% above fair value)
Industry Position: 535.4% above the Semiconductors median (#149 of 1023)
No single metric tells the full story. See the ARM stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Arm Holdings is the IP owner and developer of the Arm architecture, which is used in 99% of the world's smartphone CPU cores. It also has high market share in other battery-powered devices like wearables, tablets, and sensors. Arm licenses its architecture for a fee, offering different types of licenses depending on the flexibility the customer needs. Customers like Apple or Qualcomm buy architectural licenses, which allow them to modify the architecture and add or delete instructions to tailor the chips to their specific needs. Other clients directly buy off-the-shelf designs from Arm. Both off-the-shelf and architectural customers pay a royalty fee per chip shipped. In 2026, Arm announced the launch of its own CPU products on top of its existing royalty business.
62GF Score
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