Alarm (ALRM) AI Stock Analysis

• Market Cap: $2.57B
• Dividend Yield: N/A
• Average Volume (3M): 387.56K
• Price to Earnings (P/E): 22.1
• Beta (1Y): 1.10
• Revenue Growth: 7.35%
• EPS Growth: 2.44%
• Country: US
• Employees: 2,020
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.76
• Shares Outstanding: 49,879,680
• 10 Day Avg. Volume: 450,248
• 30 Day Avg. Volume: 387,565
• 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: 1.23
• Enterprise Value/Revenue: 3.19
• Enterprise Value/Gross Profit: 4.40
• Enterprise Value/Ebitda: 14.20
• 1Y Price Target: $66.80
• Price Target Upside: 28.66% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 2.49
• Revenue Forecast (FY): $1.00B

• Rating: 72 Outperform
• Price Target: $57.00 ▲(9.78% Upside)

Alarm's strong SaaS revenue growth and positive earnings call sentiment are significant strengths, contributing to a robust outlook. However, increased leverage and declining free cash flow present risks that need careful management. The stock's moderate valuation and technical indicators support a positive but cautious investment stance.

Positive Factors

SaaS Revenue Growth

Strong SaaS revenue growth indicates robust demand for Alarm's subscription services, supporting long-term revenue stability and market expansion.

EnergyHub Performance

EnergyHub's strong performance and partnerships, such as with Tesla, enhance Alarm's competitive edge in the energy management sector.

New Product Launches

The introduction of new AI-driven products positions Alarm to capitalize on advanced technology trends, enhancing its market offering.

Negative Factors

Increased Leverage

Higher leverage may strain financial flexibility, requiring careful management to avoid impacting long-term financial health.

Declining Free Cash Flow

Declining free cash flow could challenge liquidity, affecting the company's ability to invest in growth and manage debt effectively.

International Growth Lagging

Lagging international growth may limit Alarm's global market expansion, impacting its long-term revenue diversification strategy.

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 multiple streams, primarily by offering subscription-based services for its cybersecurity solutions. This includes monthly or annual fees for continuous monitoring, threat detection, and response capabilities. Additionally, the company may generate income through consulting services, where they assess and enhance clients' cybersecurity infrastructure. Key partnerships with technology providers and integration with existing IT systems also contribute to their revenue, as they can offer bundled services that enhance their value proposition to clients. Furthermore, Alarm may benefit from strategic alliances with industry leaders, which can lead to increased customer trust and expanded market reach.

Alarm Financial Statement Overview

Summary

Alarm demonstrates strong revenue growth and profitability, with improving gross margins. However, the high leverage and declining free cash flow pose potential risks. The company needs to address cash flow challenges to maintain financial stability.

Income Statement

Alarm has shown consistent revenue growth over the years, with a TTM (Trailing-Twelve-Months) revenue growth rate of 1.63%. The gross profit margin has improved to 72.42% in the TTM, indicating strong cost management. However, the net profit margin slightly decreased to 12.92% from the previous year. The EBIT and EBITDA margins are stable, reflecting efficient operations.

Balance Sheet

The company's debt-to-equity ratio is relatively high at 1.29 in the TTM, indicating significant leverage. However, the return on equity remains healthy at 16.48%, suggesting effective use of equity. The equity ratio is moderate, reflecting a balanced asset structure.

Cash Flow

Alarm's free cash flow has declined significantly, with a TTM growth rate of -103.48%, raising concerns about cash generation. The operating cash flow to net income ratio is low at 0.09, indicating potential cash flow challenges. The negative free cash flow to net income ratio further highlights cash flow issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	991.77M	939.83M	881.68M	842.56M	748.97M	618.00M
Gross Profit	718.24M	613.68M	556.52M	499.98M	443.07M	390.57M
EBITDA	222.55M	196.29M	145.38M	102.47M	102.67M	111.16M
Net Income	128.17M	124.12M	81.04M	56.34M	52.26M	77.85M
Balance Sheet
Total Assets	2.12B	2.04B	1.44B	1.33B	1.23B	731.69M
Cash, Cash Equivalents and Short-Term Investments	1.07B	1.22B	696.98M	622.16M	710.62M	253.46M
Total Debt	1.07B	1.06B	526.03M	529.91M	468.27M	157.67M
Total Liabilities	1.24B	1.27B	714.71M	706.53M	605.96M	253.24M
Stockholders Equity	827.19M	726.55M	688.55M	598.86M	613.17M	467.75M
Cash Flow
Free Cash Flow	154.94M	196.28M	121.79M	28.26M	87.73M	81.59M
Operating Cash Flow	173.66M	206.41M	135.97M	56.90M	103.16M	102.08M
Investing Cash Flow	-258.13M	-24.68M	-25.97M	-68.32M	-20.36M	-20.27M
Financing Cash Flow	-19.33M	346.43M	-31.86M	-76.32M	374.37M	52.02M

Alarm Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 51.92
• 50DMA: Positive
• 100DMA: Negative
• 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 51.92 is above the 20-day moving average (MA) of 50.38, above the 50-day MA of 50.67, and below the 200-day MA of 54.83, indicating a neutral trend. The MACD of 0.39 indicates Negative momentum. The RSI at 55.93 is Neutral, neither overbought nor oversold. The STOCH value of 65.59 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	72 Outperform	$2.57B	22.05	16.89%	―	7.35%	2.44%
RNG	63 Neutral	$2.55B	206.64	―	―	5.45%	―
GBTG	62 Neutral	$4.13B	351.79	0.76%	―	5.71%	―
SMRT	62 Neutral	$323.53M	―	-25.48%	―	-24.30%	-181.62%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
ALKT	60 Neutral	$2.23B	―	-12.74%	―	30.72%	9.70%
GRND	48 Neutral	$2.52B	―	-171.54%	―	28.97%	-4.18%

Alarm Corporate Events

Alarm.com Reports Strong Q3 2025 Revenue Growth

Alarm.com Holdings Inc. is a leading platform in the smart property technology sector, providing solutions for security, video surveillance, and energy management to homeowners and businesses globally.

Alarm.com Earnings Call: Strong Growth Amid Challenges

Alarm.com Holdings Inc. recently held an earnings call that revealed a strong financial performance, marked by above-expectation results in revenue and EBITDA. The company showcased significant growth in key business segments, although concerns were raised about tariffs and a weak housing market, which could pose challenges in the future. Nevertheless, strategic investments and a robust cash position provide a buffer against these potential hurdles.

Alarm.com Reports Strong Q2 2025 Earnings Growth

Alarm.com Holdings Inc., a leader in intelligently connected property technology, provides solutions for security, video surveillance, and energy management, serving both residential and commercial markets globally. In its second quarter of 2025, Alarm.com reported a 9.0% increase in SaaS and license revenue, reaching $170 million, and an 8.8% rise in total revenue to $254.3 million compared to the same period in 2024. The company also saw a 5.2% increase in GAAP net income, amounting to $34.2 million, and a 13.0% rise in non-GAAP adjusted EBITDA to $48.4 million. Alarm.com’s recent strategic initiatives include the launch of AI-driven video analytics by its subsidiary OpenEye and a new smart thermostat, enhancing its product offerings. Looking ahead, Alarm.com has raised its full-year guidance, expecting SaaS and license revenue to range between $681.0 million and $681.4 million, and total revenue to reach up to $996.4 million, reflecting a positive outlook based on current management expectations.