Alarm (ALRM) AI Stock Analysis

• Market Cap: $2.63B
• Dividend Yield: N/A
• Average Volume (3M): 387.72K
• Price to Earnings (P/E): 22.2
• Beta (1Y): 1.05
• Revenue Growth: 7.81%
• EPS Growth: 20.84%
• Country: US
• Employees: 2,020
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.60
• Shares Outstanding: 49,905,033
• 10 Day Avg. Volume: 513,056
• 30 Day Avg. Volume: 387,717
• PEG Ratio: 0.46
• Price to Book (P/B): 4.15
• Price to Sales (P/S): 3.21
• P/FCF Ratio: 15.38
• Enterprise Value/Market Cap: 1.33
• Enterprise Value/Revenue: 3.58
• Enterprise Value/Gross Profit: 4.95
• Enterprise Value/Ebitda: 15.96
• 1Y Price Target: $71.00
• Price Target Upside: 34.67% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 74 Outperform
• Price Target: $64.00 ▲(21.40% Upside)

Alarm.com demonstrates strong financial performance with robust revenue growth and profitability, despite high leverage. The technical indicators suggest stable momentum, and the earnings call provided positive guidance with some concerns. The recent corporate event supports strategic alignment with shareholder interests.

Positive Factors

Revenue Growth

Alarm's consistent revenue growth indicates strong market demand and effective business strategy, supporting long-term expansion and stability.

Diverse Revenue Streams

Diversification across business segments reduces risk and enhances resilience, positioning Alarm for sustained growth in various markets.

Strong Profitability

High profitability margins reflect efficient operations and cost management, providing a solid foundation for reinvestment and competitive advantage.

Negative Factors

High Leverage

Significant leverage may constrain financial flexibility and increase risk, potentially impacting Alarm's ability to invest in growth opportunities.

Decline in Free Cash Flow

A decline in free cash flow growth can limit the company's ability to fund operations and strategic initiatives, affecting long-term financial health.

Tariff Impacts

Tariff-related cost increases could pressure margins and affect competitiveness, posing a challenge to maintaining profitability in affected markets.

Alarm Business Overview & Revenue Model

Company Description

Alarm.com Holdings, Inc. provides cloud-based solutions for smart residential and commercial properties in the United States and internationally. It operates in two segments, Alarm.com and Other. The company provides interactive security solutions to control and monitor their security systems, as well as connected security devices, including door locks, motion sensors, door locks, garage doors, Internet of Things, thermostats, and video cameras; and video monitoring solutions, such as video analytics, live streaming, video doorbell, video clips, video alerts, continuous high definition recording, and commercial video surveillance solutions. It also offers intelligent automation and energy management solutions comprising scenes button; smart thermostat schedules; responsive savings; precision comfort; energy usage monitoring; heating, ventilation, and air conditioning monitoring services; whole home water safety solutions; geo-services; and demand response programs. In addition, the company provides commercial solutions, such as daily safeguards, commercial grade video, energy savings, protection for valuables and inventory, temperature monitoring, multi-site management and access control, early identification, simple to use, professionally supported, and easy to maintain. Further, it offers service provider solutions, including a permission-based online portal that offers account management, sales, marketing, training, and support tools; sales, marketing, and training services; and home builder programs, as well as wellness solutions. The company serves residential and commercial subscribers. Alarm.com Holdings, Inc. was founded in 2000 and is based in Tysons, Virginia.

How the Company Makes Money

Alarm generates revenue through a multi-faceted business model that includes the sale of hardware products, subscription services, and monitoring fees. Key revenue streams consist of direct sales from security equipment and smart home devices, which are often bundled with installation services. Additionally, Alarm offers subscription-based monitoring services that provide customers with 24/7 surveillance and support, contributing significantly to recurring revenue. The company may also engage in partnerships with homebuilders, real estate developers, and retail outlets to expand its distribution channels and enhance its market presence, further bolstering its earnings.

Alarm Financial Statement Overview

Summary

Alarm exhibits strong revenue growth and profitability, supported by efficient operations. While the balance sheet shows high leverage, the company effectively generates returns on equity. Cash flow management presents some challenges with recent declines in free cash flow growth, but operational cash generation remains stable.

Income Statement

Alarm has demonstrated strong revenue growth with a TTM (Trailing-Twelve-Months) increase of 2.15%, building on previous annual growth. The company maintains robust profitability with a gross profit margin of 72.31% and a net profit margin of 13.27% in the TTM. EBIT and EBITDA margins are also healthy at 17.82% and 22.44%, respectively, indicating efficient cost management and operational effectiveness.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio of 1.33 in the TTM, which suggests significant leverage. However, the return on equity remains strong at 17.42%, indicating effective use of equity to generate profits. The equity ratio is moderate, reflecting a balanced asset structure.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 28.37% in the TTM, which could be a concern. However, the operating cash flow to net income ratio is 0.20, and the free cash flow to net income ratio is 0.88, indicating reasonable cash conversion efficiency despite the recent drop in free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	975.87M	939.83M	881.68M	842.56M	748.97M	618.00M
Gross Profit	705.63M	613.68M	556.52M	499.98M	443.07M	390.57M
EBITDA	218.95M	196.29M	145.38M	102.47M	102.67M	111.16M
Net Income	129.51M	124.12M	81.04M	56.34M	52.26M	77.85M
Balance Sheet
Total Assets	2.10B	2.04B	1.44B	1.33B	1.23B	731.69M
Cash, Cash Equivalents and Short-Term Investments	1.02B	1.22B	696.98M	622.16M	710.62M	253.46M
Total Debt	1.06B	1.06B	526.03M	529.91M	468.27M	157.67M
Total Liabilities	1.25B	1.27B	714.71M	706.53M	605.96M	253.24M
Stockholders Equity	797.35M	726.55M	688.55M	598.86M	613.17M	467.75M
Cash Flow
Free Cash Flow	119.38M	196.28M	121.79M	28.26M	87.73M	81.59M
Operating Cash Flow	135.62M	206.41M	135.97M	56.90M	103.16M	102.08M
Investing Cash Flow	-248.51M	-24.68M	-25.97M	-68.32M	-20.36M	-20.27M
Financing Cash Flow	-9.93M	346.43M	-31.86M	-76.32M	374.37M	52.02M

Alarm Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 52.72
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALRM, the sentiment is Negative. The current price of 52.72 is below the 20-day moving average (MA) of 55.85, below the 50-day MA of 55.91, and below the 200-day MA of 57.79, indicating a bearish trend. The MACD of -0.94 indicates Positive momentum. The RSI at 29.04 is Positive, neither overbought nor oversold. The STOCH value of 4.32 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALRM.

Alarm Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALRM	74 Outperform	$2.63B	22.19	17.95%	―	7.81%	20.84%
GBTG	68 Neutral	3.90B	-63.10	-13.13%	―	3.61%	-44.99%
RNG	65 Neutral	2.78B	-227.58	4.24%	―	6.47%	90.60%
ALKT	65 Neutral	2.67B	-67.86	-11.19%	―	29.63%	29.87%
SMRT	58 Neutral	272.70M	-3.88	-11.62%	―	-28.45%	-224.48%
GRND	50 Neutral	3.02B	-39.96	-29.58%	―	28.35%	24.57%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Alarm Corporate Events

Alarm.com Approves 2025 Equity Incentive Plan

On June 4, 2025, Alarm.com Holdings, Inc. held its Annual Meeting of Stockholders, where several key proposals were approved. Notably, the stockholders approved the 2025 Equity Incentive Plan, which is expected to impact the company’s operational strategies by aligning employee incentives with shareholder interests. Additionally, the election of eight directors, the ratification of PricewaterhouseCoopers LLP as the independent auditor, and the advisory approval of executive compensation were confirmed, signaling strong shareholder support for the company’s governance and strategic direction.