Both Arm Holdings plc ARM and Byrna Technologies Inc. BYRN are innovation-focused companies that resonate with growth-oriented investors seeking exposure to disruptive technologies.
While Arm Holdings is a global leader in semiconductor design, powering next-generation AI and computing advancements across industries, Byrna develops non-lethal personal defense solutions, carving out a unique niche in civilian and law enforcement markets. Despite operating in vastly different sectors, both companies share a common goal: to challenge legacy systems with transformative, high-impact technologies.
As innovation continues to reshape the investment landscape, the question arises: Which of these two tech disruptors offers the more compelling opportunity today?
The Case for ARM
Arm Holdings’ Stronghold in mobile and AI reflects its innovation-driven DNA. The company has a dominant presence in the semiconductor industry, particularly in mobile devices. The company’s low-power architecture, especially in smartphones and tablets, has been a staple for decades. With the increasing proliferation of mobile computing, it remains at the forefront of supplying technology to leading manufacturers like Apple AAPL, Samsung and Qualcomm QCOM. This stable demand serves as a core strength, driven by Arm’s commitment to continual innovation.
As AI and the Internet of Things (IoT) grow, Arm Holdings is uniquely positioned to benefit from these technological trends. ARM-powered chips are being integrated into smart devices, autonomous systems and data centers, capitalizing on AI’s computational needs. With the surge in AI workloads and IoT devices requiring efficient, scalable, and low-power processing solutions, ARM’s architecture plays a vital role. The company’s focus on adapting its designs for AI-centric operations adds significant growth potential, underscoring its innovation-led strategy.
A key pillar of Arm Holdings’ innovation-focused strategy is its unique licensing and royalty-based business model. ARM licenses its chip designs to major technology companies and earns royalties on every chip sold. This model provides a steady stream of revenues without significant capital expenditure. Furthermore, partnerships with key industry players allow the company to maintain relevance, ensuring it remains a preferred choice in sectors like automotive, data centers and smart devices, industries ripe for innovation.
Arm Holdings’ IPO brought in a significant influx of capital, strengthening its balance sheet. As of Dec. 31, the company held $2.7 billion in cash and had no debt. With a healthy cash reserve, it is better positioned to fund its research and development initiatives, pursue strategic acquisitions and expand its market presence. This financial flexibility also places the company in a stronger competitive position, enabling it to weather market fluctuations and invest in future innovation-driven growth opportunities.
The Case of BYRN
Byrna continues to solidify its position as an innovation-focused leader in the non-lethal personal defense space. Through a creative and tech-enabled marketing strategy, the company has achieved high brand visibility, driven by a successful celebrity endorsement program and widespread media coverage. In fiscal 2024, Byrna delivered over a 5X return on ad spend from these efforts, fueling a record $28.0 million in fourth-quarter sales.
By integrating public education with product innovation, Byrna has helped normalize less-lethal solutions among consumers and law enforcement. This innovation-led brand strategy contributed to a 79% year-over-year sales increase in the fourth quarter. Net income also saw a dramatic turnaround, rising from a $0.8 million loss a year ago to a $9.7 million profit—an impressive $10.5 million swing.
Looking ahead, Byrna is advancing on multiple innovation-driven fronts. The company is ramping up production and preparing to launch its new Compact Launcher in mid-2025, a next-gen device designed for portability and user convenience. Production of its launcher platform has already increased by 33% in the first fiscal quarter of 2025, reaching 24,000 units per month to meet escalating demand.
Byrna is also expanding its omnichannel strategy with more company-owned retail stores and deepening its footprint in Latin America through forward-looking law enforcement partnerships. Notably, it has extended its reach into Mexico by partnering with the Secretaría de Trabajo y Previsión Social to create a federally certified civilian training program for Byrna device use, an innovative regulatory milestone.
In parallel, BYRN is optimizing its operations by shifting ammunition production to domestic facilities, enhancing supply chain control and boosting margins. Combined with continued investment in marketing and product development, these strategic moves underscore Byrna’s commitment to technological innovation and long-term growth.
How Do Zacks Estimates Compare for ARM & BYRN?
The Zacks Consensus Estimate for ARM’s fiscal 2025 sales and EPS indicates year-over-year growth of 24% and 28%, respectively. There has been no change in analyst estimates or revisions lately.
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The Zacks Consensus Estimate for BYRN’s fiscal 2025 sales and EPS indicates year-over-year growth of 30% and 13%, respectively. EPS estimates have been trending upward over the past 30 days.
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ARM’s Valuation More Attractive Than BYRN
ARM is trading at a forward earnings multiple of 49.31X, below its 12-month median of 127.41X. BYRN’s forward earnings multiple stands at 54.26X, below its median of 96.9X.
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Verdict
Byrna is a Buy, driven by rapid revenue growth, a sharp turnaround to profitability, rising EPS estimates, and aggressive expansion across products and geographies. Its upward momentum and innovation in the non-lethal defense niche make it a compelling growth play. Arm Holdings, while a global leader in AI and mobile semiconductors, is best rated a Hold for now. Despite strong fundamentals and a lower forward P/E than BYRN, ARM has seen flat analyst revisions and faces a more mature growth curve. Investors may consider waiting for a stronger earnings catalyst before adding to ARM positions.
BYRN carries a Zacks Rank #2 (Buy) and ARM has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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