ARM HoldingsARM +2.79%62 3-Year ROIIC % is 7.58 as of Mar. 2026, which is 51% below its 10-year median of 15.56. GuruFocus rates ARM with a GF Score™ of 62/100 and a GF Value™ of $177.73 (Significantly Overvalued). The stock has 1 warning sign investors should review. Among 996 Semiconductors companies, ARM Holdings ranks better than 60.14% on this metric.
3-Year Return on Invested Incremental Capital (3-Year ROIIC %) measures the change in earnings as a percentage of change in investment over 3-year.
ARM Holdings's 3-Year ROIIC % for the quarter that ended in Mar. 2026 was 7.58%. High ROIIC is generally an indication that your business is capital efficient or has a higher operating leverage.
The industry rank for ARM Holdings's 3-Year ROIIC % or its related term are showing as below:
ARM's 3-Year ROIIC % is ranked better than 60.14% of 996
companies
in the Semiconductors industry
Industry Median: -0.155
vs ARM: 7.58
ARM Holdings (NAS:ARM) 3-Year ROIIC % Explanation
Return on Incremental Invested Capital (ROIIC) is an extension of Return on Investment Capital (ROIC). ROIC % tells investors how efficiently that profitability is earned per dollar of company capital. ROIIC narrows the focus even further and shows how profitable each additional unit of capital investment could be. ROIIC % is a more powerful metric than ROIC because it measures how much money the company can generate going forward on future capital investments.
High ROIIC is generally an indication that your business is capital efficient or has a higher operating leverage.
Be Aware
It's important to keep in mind that when tracking ROIIC, the metric is better suited to forecasting the trend of future returns rather than measuring current return on investment.
ARM Holdings 3-Year ROIIC % Related Terms
ARM Holdings 3-Year ROIIC % Historical Data
* Premium members only.
The historical data trend for ARM Holdings's 3-Year ROIIC % 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 3-Year ROIIC %, along with its competitors' market caps and 3-Year ROIIC % 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 3-Year ROIIC % vs Semiconductors Industry
For the Semiconductors industry and Technology sector, ARM Holdings's 3-Year ROIIC % distribution charts can be found below:
* The bar in red indicates where ARM Holdings's 3-Year ROIIC % falls into.
ARM Holdings's 3-Year ROIIC % for the quarter that ended in Mar. 2026 is calculated as:
3-Year ROIIC %
=
3-Year Incremental Net Operating Profit After Taxes (NOPAT)**
/
3-Year Incremental Invested Capital**
=
( 709.4204 (Mar. 2026) - 529.4502 (Mar. 2023) )
/
( 6645 (Mar. 2026) - 4270 (Mar. 2023) )
=
179.9702
/
2375
=
7.58%***
* 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.
** Annual data of NOPAT and Invested Capital was used to calculate 3-Year ROIIC %.
*** Please be aware that the ROIIC (Return on Invested Capital) calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
ARM Holdings (ARM) has a 3-Year ROIIC % of 7.58 as of Mar. 2026. 3-Year ROIIC % measures the change in earnings as a percentage of change in investment over 3-year. View historical data on ARM Holdings and its competitors. This is 51% below median its historical median of 15.56. Over the past decade, ARM Holdings' 3-Year ROIIC % has ranged from 7.58 to 23.53. According to the industry distribution chart, ARM Holdings ranks #397 out of 996 companies in the Semiconductors industry, placing it in the top 39.9%.
Is ARM Holdings' 3-Year ROIIC % too high?
ARM Holdings' current 3-Year ROIIC % of 7.58 is 51% below median its 10-year median of 15.56. Over the past 10 years, this metric has ranged from a low of 7.58 to a high of 23.53. Based on the distribution chart, ARM Holdings ranks #397 out of 996 companies in the Semiconductors industry, which is above the industry midpoint. 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' 3-Year ROIIC % compare to TXN and MRVL?
According to the Semiconductors industry distribution chart, ARM Holdings ranks #397 out of 996 companies for 3-Year ROIIC %. This puts ARM Holdings in the upper half of its industry. Historically, ARM Holdings' own 3-Year ROIIC % has ranged from 7.58 to 23.53 over the past decade. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good 3-Year ROIIC % for a Semiconductors company?
A good 3-Year ROIIC % depends on the Semiconductors industry context. However, 3-Year ROIIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high 3-Year ROIIC % mean?
A high 3-Year ROIIC % can signal that a stock is expensive relative to its fundamentals. 3-Year ROIIC % measures the change in earnings as a percentage of change in investment over 3-year. View historical data on ARM Holdings and its competitors. ARM Holdings's current 3-Year ROIIC % is 7.58, which is 51% below median its own 10-year median of 15.56. 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 $177.73, compared to a current price of $343.58 — trading 93.3% above its estimated fair value. The current 3-Year ROIIC % is 7.58, which is 51% below median its 10-year median of 15.56. 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 3-Year ROIIC % calculated?
3-Year ROIIC % is calculated from a company's financial statements. For ARM Holdings (ARM), the current 3-Year ROIIC % is 7.58 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 $343.58 is trading 93.3% above its estimated GF Value™ of $177.73.
GuruFocus considers ARM Holdings to be Significantly Overvalued.
Key valuation signals for ARM:
3-Year ROIIC %: 7.58 (51% below median its 10-year median of 15.56)
GF Value™: $177.73 vs. price of $343.58 (93.3% above fair value)
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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