ARM HoldingsARM -3.87%62 3-Year RORE % is 29.81 as of Mar. 2026. 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 961 Semiconductors companies, ARM Holdings ranks better than 63.68% on this metric.
Return on Retained Earnings (RORE) is an indicator of a company's growth potential, it shows how much a company earns by reinvesting its retained earnings, i.e. profits after dividend payments.
ARM Holdings's 3-Year RORE % for the quarter that ended in Mar. 2026 was 29.81%.
The industry rank for ARM Holdings's 3-Year RORE % or its related term are showing as below:
ARM's 3-Year RORE % is ranked better than 63.68% of 961
companies
in the Semiconductors industry
Industry Median: 12.15
vs ARM: 29.81
ARM Holdings (NAS:ARM) 3-Year RORE % Explanation
Return on Retained Earnings (RORE) is important to investors because it reveals a company's efficiency and growth potential. A higher RORE indicates a higher return. A high RORE indicates that the company should reinvest profits into the business. A lower RORE suggests that the company should distribute profits to shareholders by paying out dividends, since those dollars aren't generating much additional growth for the company.
There are a several different ways to arrive at the Return on Retained Earnings. The simplest way to calculate it is by using published information on Earnings per Share (EPS) and Dividend per Share (DPS) over a selected period. Here, 3-year period is chosen.
Be Aware
Please keep in mind that the RORE is relative to the nature of the business and its competitors. If another company in the same sector is producing a lower return on retained earnings, it doesn’t necessarily mean it’s a bad investment. It may just suggest the company is older and no longer in a high growth stage. At such a stage in the business cycle, it would be expected to see a lower RORE and higher dividend payout.
ARM Holdings 3-Year RORE % Related Terms
ARM Holdings 3-Year RORE % Historical Data
* Premium members only.
The historical data trend for ARM Holdings's 3-Year RORE % 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 RORE %, along with its competitors' market caps and 3-Year RORE % 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 RORE % vs Semiconductors Industry
For the Semiconductors industry and Technology sector, ARM Holdings's 3-Year RORE % distribution charts can be found below:
* The bar in red indicates where ARM Holdings's 3-Year RORE % 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.
In the calculation of 3-Year RORE %, the most recent and first period EPS (Diluted) is the trailing twelve months (TTM) data ended in Mar. 2026 and 3-year before.
ARM Holdings (ARM) has a 3-Year RORE % of 29.81 as of Mar. 2026. 3-Year RORE % shows how much a company earns by reinvesting its retained earnings in 3-year. View historical data on ARM Holdings and its competitors. According to the industry distribution chart, ARM Holdings ranks #349 out of 961 companies in the Semiconductors industry, placing it in the top 36.3%.
Is ARM Holdings' 3-Year RORE % too high?
ARM Holdings' current 3-Year RORE % is 29.81. The Semiconductors industry median 3-Year RORE % is 12.15. ARM Holdings' value of 29.81 is 145.3% above this industry median. Based on the distribution chart, ARM Holdings ranks #349 out of 961 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 RORE % compare to TXN and QCOM?
According to the Semiconductors industry distribution chart, ARM Holdings ranks #349 out of 961 companies for 3-Year RORE %. This puts ARM Holdings in the upper half of its industry. The industry median 3-Year RORE % is 12.15. ARM Holdings' value of 29.81 is 145.3% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good 3-Year RORE % for a Semiconductors company?
The median 3-Year RORE % among Semiconductors companies is 12.15, based on 961 companies in the industry. Companies in the top quartile (top 25%) have a 3-Year RORE % significantly above this median, while those in the bottom quartile fall well below. However, 3-Year RORE % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. ARM Holdings's current 3-Year RORE % of 29.81 is 145.3% 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 3-Year RORE % mean?
A high 3-Year RORE % can signal that a stock is expensive relative to its fundamentals. 3-Year RORE % shows how much a company earns by reinvesting its retained earnings in 3-year. View historical data on ARM Holdings and its competitors. For the Semiconductors industry, the median 3-Year RORE % is 12.15 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. ARM Holdings's current 3-Year RORE % is 29.81. 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 $334.27 — trading 88.1% above its estimated fair value. The current 3-Year RORE % is 29.81 and 145.3% above the Semiconductors industry median of 12.15. 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 RORE % calculated?
3-Year RORE % is calculated from a company's financial statements. For ARM Holdings (ARM), the current 3-Year RORE % is 29.81 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 $334.27 is trading 88.1% above its estimated GF Value™ of $177.73.
GuruFocus considers ARM Holdings to be Significantly Overvalued.
Key valuation signals for ARM:
3-Year RORE %: 29.81
GF Value™: $177.73 vs. price of $334.27 (88.1% above fair value)
Industry Position: 145.3% above the Semiconductors median (#349 of 961)
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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3-Year RORE % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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