Arm Holdings plc is set to announce its second-quarter fiscal 2026 results on November 5, following the market close. Analysts have high expectations for the tech company, with the Zacks Consensus Estimate indicating earnings of 33 cents per share, reflecting a 10% increase compared to the same quarter last year. Revenue projections also look promising, with an estimated figure of $1.07 billion, signaling a remarkable 26% year-over-year rise.
Historically, Arm has shown a solid track record when it comes to earnings surprises. The company has exceeded the Zacks Consensus Estimate in each of the last four quarters, boasting an average earnings surprise of 11.6%. Interestingly, there have been no changes to the earnings estimate for the upcoming quarter during the past 30 days, suggesting a stable outlook from analysts.
However, the current indications are mixed regarding whether Arm will beat earnings expectations this time. The company’s Earnings ESP stands at 0.00%, and it holds a Zacks Rank of #3 (Hold), which does not contribute significantly to a favorable prediction for a beat. Investors seeking recommendations on stocks to buy or sell ahead of earnings reports are encouraged to utilize tools like the Earnings ESP Filter available through Zacks.
The anticipated revenue growth for Arm in the forthcoming quarter is expected to be mainly driven by increases in royalty, licensing, and other revenues. The consensus estimate for royalty revenues is projected at $482 million, marking a 14% year-over-year increase, while license and other revenues are estimated at $482 million, indicating a substantial 46% year-over-year growth.
In terms of stock performance, Arm has experienced a robust 38% increase over the past six months, propelling its valuation higher. Currently, Arm shares are trading at a forward Price/Earnings ratio of 84.67, significantly above the industry average of 35.14.
With an optimistic view of revenue growth fueled by royalties and licensing, Arm Holdings is poised for a promising earnings report that could bolster investor confidence further.