Alarum Technologies (ALAR) AI Stock Analysis

• Market Cap: $100.92M
• Dividend Yield: N/A
• Average Volume (3M): 116.19K
• Price to Earnings (P/E): 18.4
• Beta (1Y): 1.83
• Revenue Growth: -1.43%
• EPS Growth: 3.86%
• Country: US
• Employees: 68
• Sector: Technology
• Sector Strength: 82
• Industry: Software - Infrastructure
• EPS (TTM): <0.01
• Shares Outstanding: 7,100,902
• 10 Day Avg. Volume: 169,611
• 30 Day Avg. Volume: 116,186
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.80
• Enterprise Value/Revenue: 2.54
• Enterprise Value/Gross Profit: 3.39
• Enterprise Value/Ebitda: 10.66
• 1Y Price Target: $19.50
• Price Target Upside: 35.23% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 77 Outperform
• Price Target: $16.50 ▲(14.42% Upside)

Alarum Technologies demonstrates strong financial performance and promising growth prospects, particularly in AI-driven markets. The stock's technical indicators suggest a positive trend, though valuation remains moderate. The earnings call underscores strategic investments for future growth, despite some operational challenges.

Positive Factors

Guidance and Revenue

Alarum's Q3 guidance implies 78% year-over-year growth and includes a significant AI-driven customer engagement expected to contribute $3M in revenue.

Market Position and Potential

The company is seen as sitting at a critical position within AI data pipelines with rapidly ramping customer demand, providing strong growth potential.

Strategic Partnerships and Growth

Management is actively engaging in late-stage conversations with large global brands, presenting an opportunity for Alarum to become a key element in AI-related data pipelines.

Negative Factors

Customer Retention

Alarum's net retention rate decreased to 98% in Q2, a significant step-down from previous levels, due to an ongoing shift in customer segments.

Revenue Growth Challenges

Sluggish revenue growth was chalked up to certain customers pausing or reducing usage to reassess strategies on the heels of increased website blocking that challenges data collection.

Usage Volatility and Demand

Alarum's recent challenges are perplexing with softer near-term demand and usage volatility due to websites actively restructuring access in response to AI-driven data scraping needs.

Alarum Technologies Business Overview & Revenue Model

Company Description

Alarum Technologies Ltd. provides cybersecurity and privacy solutions to consumers and enterprises in Israel, the United States, Hong Kong, the Asia Pacific, and internationally. Its cybersecurity solutions comprise iShield, a cybersecurity cloud software that protects users from online threats, including phishing, malware, ransomware and others; AdBlocker, an iOS application for an ad-free internet experience; ZoneZero SDP, a solution based on software defined perimeter and zero trust network access concepts that grant access to applications on a need-to-know basis only; ZoneZero MFA, a solution designed to add centralized multi-factor authentication capabilities for various types of internal applications; and SDE, which is designed to unify various data exchange scenarios of an organization. The company also provides Proxy solutions consisting of static and dynamic residential proxy network cloud services, data center proxy network cloud services, and data collection API cloud services; Proxy-in-a-Box, an on-premise solution of private proxy access network for customers who wish to deploy and maintain their own proxy network; and Premium dedicated static residential proxies, a solution that creates a dedicated static IP for each user. It offers its products through resellers, distributors, and internet service providers. The company serves finance, healthcare, and retail sectors; and government agencies, commercial and online companies, and educational institutions. The company was formerly known as Safe-T Group Ltd. and changed its name to Alarum Technologies Ltd. in January 2023. Alarum Technologies Ltd. was founded in 2013 and is headquartered in Tel Aviv-Yafo, Israel.

How the Company Makes Money

Alarum Technologies generates revenue through a combination of direct product sales, subscription-based services, and consulting fees. The primary revenue stream comes from the sale of its cybersecurity software and hardware solutions, which are tailored for businesses of varying sizes. Additionally, the company offers subscription plans for ongoing access to its cloud-based security services, which provide continuous updates, monitoring, and support. Consulting services, including security assessments and compliance audits, contribute further to its earnings. Alarum Technologies has forged strategic partnerships with other tech firms and cybersecurity organizations, enhancing its market reach and enabling bundled offerings that attract a broader customer base, thus significantly boosting its revenue potential.

Alarum Technologies Financial Statement Overview

Summary

Alarum Technologies shows strong financial recovery with revenue growth, improved profitability, and robust cash flow. Minimal leverage and strong equity position enhance financial stability, although scalability is limited by relatively low assets.

Income Statement

Alarum Technologies has demonstrated strong growth in revenue, increasing by 20% from the previous year. The company turned around its net income from a loss to a profit of $5.78 million, resulting in a net profit margin of 18.2%. The gross profit margin is robust at 75.1%, and both EBIT and EBITDA margins have significantly improved, indicating enhanced operational efficiency.

Balance Sheet

The company's balance sheet shows a solid equity position with a high equity ratio of 75.7%. The debt-to-equity ratio is low at 0.06, reflecting minimal leverage. Return on equity stands at 21.9%, highlighting effective utilization of equity to generate profits. However, the relatively low total assets compared to industry peers might limit scalability.

Cash Flow

Alarum Technologies has shown remarkable improvement in cash flow, with free cash flow increasing significantly. The operating cash flow to net income ratio of 1.54 indicates strong cash generation relative to earnings. The free cash flow to net income ratio is robust at 1.52, showcasing excellent cash conversion capabilities. Despite past negative cash flows, the company has managed a positive trajectory in recent periods.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	31.82M	26.52M	18.78M	10.28M	4.89M
Gross Profit	23.91M	19.11M	10.13M	5.14M	2.39M
EBITDA	8.31M	-2.90M	-10.53M	-9.70M	-6.58M
Net Income	5.78M	-5.53M	-13.15M	-13.13M	-7.84M
Balance Sheet
Total Assets	34.81M	20.07M	22.37M	30.65M	22.97M
Cash, Cash Equivalents and Short-Term Investments	15.08M	10.87M	3.29M	9.71M	11.02M
Total Debt	1.59M	1.99M	3.05M	562.00K	663.00K
Total Liabilities	8.46M	6.88M	9.06M	6.47M	6.76M
Stockholders Equity	26.35M	13.18M	13.31M	24.19M	16.22M
Cash Flow
Free Cash Flow	8.79M	4.67M	-8.11M	-9.49M	-6.75M
Operating Cash Flow	8.89M	4.73M	-8.05M	-9.21M	-6.61M
Investing Cash Flow	-9.34M	592.00K	5.04M	-9.80M	-1.19M
Financing Cash Flow	4.69M	2.21M	2.60M	11.64M	14.71M

Alarum Technologies Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 14.42
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALAR, the sentiment is Neutral. The current price of 14.42 is below the 20-day moving average (MA) of 15.61, above the 50-day MA of 13.91, and above the 200-day MA of 10.37, indicating a neutral trend. The MACD of 0.21 indicates Positive momentum. The RSI at 47.79 is Neutral, neither overbought nor oversold. The STOCH value of 22.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ALAR.

Alarum Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALAR	77 Outperform	$100.92M	18.42	21.76%	―	-1.43%	3.86%
ZENV	63 Neutral	$79.18M	―	-10.57%	―	9.04%	37.96%
Sector *	61 Neutral	$35.55B	8.88	-11.02%	1.87%	8.55%	-8.14%
VHC	―	$78.55M	―	-42.34%	―	―	―
JG	61 Neutral	$58.83M	―	-9.11%	―	18.99%	77.96%
AUID	46 Neutral	$50.01M	―	-106.55%	―	295.86%	-2.95%
REKR	42 Neutral	$137.70M	―	-128.83%	―	7.05%	19.75%