ARM HoldingsARM -3.15%62 Altman Z2-Score is 8.87 as of Jun. 25, 2026, which is 57% above its 10-year median of 5.65. 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 1,019 Semiconductors companies, ARM Holdings ranks better than 76.35% on this metric.
Altman Z2-Score, also known as Z"-Score, is used to predict the likelihood that a non-manufacturing company (excluding property/financial company) will face bankruptcy within a two-year period.
Good Sign:
ARM Holdings has a Altman Z2-Score of 8.87, indicating it is in Safe Zones. This implies the Altman Z2-Score is strong.
The zones of discrimination were as such:
When Altman Z2-Score <= 1.1, it is in Distress Zones.
When Altman Z2-Score >= 2.6, it is in Safe Zones.
When Altman Z2-Score is between 1.1 and 2.6, it is in Grey Zones.
The historical rank and industry rank for ARM Holdings's Altman Z2-Score or its related term are showing as below:
ARM'
s Altman Z2-Score Range Over the Past 10 Years
Min: 4.75 Med: 5.65 Max: 8.87
Current: 8.87
During the past 6 years, ARM Holdings's highest Altman Z2-Score was 8.87. The lowest was 4.75. And the median was 5.65.
ARM Holdings (NAS:ARM) Altman Z2-Score Explanation
The original Z-Score model was based on publicly traded manufacturing companies while the Z2-Score, also known as Z"-score can be used for any type of company excluding property/financial companies. Both Z-Score and Z2-Score describes the financial health of a company, and its likelihood of financial distress.
X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.
X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.
X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.
Altman Z2-Score does not apply to financial companies.
ARM Holdings Altman Z2-Score Related Terms
ARM Holdings Altman Z2-Score Historical Data
* Premium members only.
The historical data trend for ARM Holdings's Altman Z2-Score 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 Altman Z2-Score, along with its competitors' market caps and Altman Z2-Score 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 Altman Z2-Score vs Semiconductors Industry
For the Semiconductors industry and Technology sector, ARM Holdings's Altman Z2-Score distribution charts can be found below:
* The bar in red indicates where ARM Holdings's Altman Z2-Score falls into.
Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
Z2-Score, also known as Z"-Score is the Z-Score for non-manufacturing companies excluding property/financial companies.
ARM Holdings's Altman Z2-Score for today is calculated with this formula:
Z
=
6.56
*
X1
+
3.26
*
X2
+
6.72
*
X3
+
1.05
*
X4_2
=
6.56
*
0.4855
+
3.26
*
0.4155
+
6.72
*
0.1081
+
1.05
*
3.4282
=
8.87
* 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. GuruFocus does not calculate Altman Z2-Score when X4_2 value is 0.
ARM Holdings (ARM) has a Altman Z2-Score of 8.87 as of Jun. 25, 2026. Z2-Score is the Z-Score for non-manufacturing companies excluding property/financial companies, which measures a company's bankruptcy risk. View historical data on ARM Holdings and its competitors. This is 57% above median its historical median of 5.65. Over the past decade, ARM Holdings' Altman Z2-Score has ranged from 4.75 to 8.87. According to the industry distribution chart, ARM Holdings ranks #241 out of 1019 companies in the Semiconductors industry, placing it in the top 23.7%.
Is ARM Holdings' Altman Z2-Score too high?
ARM Holdings' current Altman Z2-Score of 8.87 is 57% above median its 10-year median of 5.65. Over the past 10 years, this metric has ranged from a low of 4.75 to a high of 8.87. The Semiconductors industry median Altman Z2-Score is 4.93. ARM Holdings' value of 8.87 is 79.9% above this industry median. Based on the distribution chart, ARM Holdings ranks #241 out of 1019 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' Altman Z2-Score compare to TXN and QCOM?
According to the Semiconductors industry distribution chart, ARM Holdings ranks #241 out of 1019 companies for Altman Z2-Score. This places ARM Holdings in the top 24% of its industry — outperforming the majority of peers. The industry median Altman Z2-Score is 4.93. ARM Holdings' value of 8.87 is 79.9% above this benchmark. Historically, ARM Holdings' own Altman Z2-Score has ranged from 4.75 to 8.87 over the past decade. While the company's 10-year median is 5.65 vs. the industry median of 4.93, 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 Altman Z2-Score for a Semiconductors company?
The median Altman Z2-Score among Semiconductors companies is 4.93, based on 1,019 companies in the industry. Companies in the top quartile (top 25%) have a Altman Z2-Score significantly above this median, while those in the bottom quartile fall well below. However, Altman Z2-Score should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. ARM Holdings's current Altman Z2-Score of 8.87 is 79.9% 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 Altman Z2-Score mean?
A high Altman Z2-Score can signal that a stock is expensive relative to its fundamentals. Z2-Score is the Z-Score for non-manufacturing companies excluding property/financial companies, which measures a company's bankruptcy risk. View historical data on ARM Holdings and its competitors. For the Semiconductors industry, the median Altman Z2-Score is 4.93 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. ARM Holdings's current Altman Z2-Score is 8.87, which is 57% above median its own 10-year median of 5.65. 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 $347.77 — trading 95.8% above its estimated fair value. The current Altman Z2-Score is 8.87, which is 57% above median its 10-year median of 5.65 and 79.9% above the Semiconductors industry median of 4.93. 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 Altman Z2-Score calculated?
Altman Z2-Score is calculated from a company's financial statements. For ARM Holdings (ARM), the current Altman Z2-Score is 8.87 as of Jun. 25, 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 $347.77 is trading 95.8% above its estimated GF Value™ of $177.63.
GuruFocus considers ARM Holdings to be Significantly Overvalued.
Key valuation signals for ARM:
Altman Z2-Score: 8.87 (57% above median its 10-year median of 5.65)
GF Value™: $177.63 vs. price of $347.77 (95.8% above fair value)
Industry Position: 79.9% above the Semiconductors median (#241 of 1019)
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
Get the complete analysis for ARM
Altman Z2-Score is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
ARM has been successfully added to your 
