Alarm (ALRM) AI Stock Analysis

• Market Cap: $2.74B
• Dividend Yield: N/A
• Average Volume (3M): 302.30K
• Price to Earnings (P/E): 23.1
• Beta (1Y): 0.99
• Revenue Growth: 7.81%
• EPS Growth: 20.84%
• Country: US
• Employees: 2,020
• Sector: Technology
• Sector Strength: 97
• Industry: Software - Application
• EPS (TTM): 0.60
• Shares Outstanding: 49,905,033
• 10 Day Avg. Volume: 393,336
• 30 Day Avg. Volume: 302,300
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.27
• Enterprise Value/Revenue: 3.58
• Enterprise Value/Gross Profit: 4.95
• Enterprise Value/Ebitda: 15.96
• 1Y Price Target: $70.14
• Price Target Upside: 21.96% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 76 Outperform
• Price Target: $65.00 ▲(13.02% Upside)

Alarm.com's strong financial performance and positive earnings call results are the most significant factors driving the score. The company's robust growth and strategic initiatives are offset by moderate technical indicators and valuation concerns. Potential risks from tariffs and the housing market are notable but mitigated by the company's strong cash position and strategic investments.

Positive Factors

Financial Performance

Alarm reported solid second-quarter results across the board with revenue exceeding expectations.

Guidance

Management raised 2025 guidance for SaaS & License revenue, total revenue, adjusted EBITDA, non-GAAP net income, and non-GAAP diluted EPS.

Market Position

Alarm.com holds a dominant position in the smart security market with over 9 million connected properties and high retention rates exceeding 93%.

Negative Factors

Market Challenges

Management reminded investors that it includes a few notable headwinds driving the deceleration relative to 2024.

Tariff Impact

Most of the tariff-related costs are expected to be passed through to customers, resulting in modest headwinds to hardware gross margins while maintaining relatively stable absolute hardware gross profit.

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.com demonstrates strong financial health with high revenue growth, solid profit margins, and a stable balance sheet. The income statement reflects robust growth, while the balance sheet indicates a stable financial position with good leverage management. Cash flow management shows room for improvement, but overall financial stability is sound.

Income Statement

The company shows strong revenue growth from $618 million in 2020 to $955 million in the TTM (Trailing-Twelve-Months) of 2025, marking a robust growth trajectory. Gross profit margins remain high, consistently over 60%, and net profit margins have improved to 13.4% in the TTM. The EBIT and EBITDA margins are stable, showing effective cost management. Overall, the income statement reflects strong financial performance and growth.

Balance Sheet

The balance sheet shows a healthy equity ratio of 36.6% in the TTM, indicating a strong equity base. The debt-to-equity ratio is moderate at 1.4, reflecting manageable leverage levels. Return on equity is commendable, with a steady increase from prior years, highlighting effective use of shareholders' equity. Overall, the balance sheet suggests a stable financial position with good leverage management.

Cash Flow

Operating cash flow remains positive, although it decreased in the TTM compared to the previous year. Free cash flow is positive, indicating the company generates sufficient cash to cover its investments. The ratio of operating cash flow to net income is lower in the TTM, suggesting potential areas for improvement in cash conversion. Overall, cash flows are stable, with ample liquidity to support operations.

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: Positive
• Last Price: 57.51
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALRM, the sentiment is Positive. The current price of 57.51 is above the 20-day moving average (MA) of 55.28, above the 50-day MA of 56.31, and below the 200-day MA of 58.34, indicating a neutral trend. The MACD of -0.21 indicates Negative momentum. The RSI at 59.26 is Neutral, neither overbought nor oversold. The STOCH value of 59.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALRM.

Alarm Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALRM	76 Outperform	$2.74B	23.15	17.95%	―	7.81%	20.84%
GTM	70 Outperform	$3.06B	36.68	5.22%	―	-0.54%	626.94%
LIF	69 Neutral	$6.48B	252.26	7.95%	―	30.04%	―
Sector *	61 Neutral	$36.32B	7.12	-9.36%	1.97%	7.79%	-9.36%
ALKT	60 Neutral	$2.26B	―	-11.47%	―	29.63%	29.87%
NCNO	58 Neutral	$3.06B	―	-2.75%	―	13.39%	16.12%
ALIT	47 Neutral	$2.07B	―	-29.09%	3.09%	-19.48%	-398.43%

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.

The most recent analyst rating on (ALRM) stock is a Hold with a $60.00 price target. To see the full list of analyst forecasts on Alarm stock, see the ALRM Stock Forecast page.