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Alarm
(NASDAQ:ALRM)
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Rating:76Outperform
Price Target:
$65.00
▲(25.53% Upside)
Action:Reiterated
Date:08/09/26
ALRM scores well primarily on healthy financial performance (strong margins and cash flow with improving leverage) and a bullish, guidance-raising earnings call that reinforces recurring-revenue durability. Technicals are supportive but somewhat overextended, and valuation is fair rather than compelling at ~21x earnings, which tempers the overall score.
Positive Factors
Strong cash generation
Consistently high operating cash flow and near-par free cash flow alignment with net income indicate durable cash conversion. This supports reinvestment, buybacks, debt paydown, and maintains strategic optionality through economic cycles, underpinning long-term financial flexibility and capital allocation.
Negative Factors
Slower recent revenue growth
A multi-year slowdown to mid-single-digit annual growth despite a strong TTM reading suggests underlying demand cyclicality or lumpy adoption. If durable growth reverts to lower mid-single digits, it may limit operating leverage, cap free-cash-flow expansion, and constrain margin and reinvestment upside over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistently high operating cash flow and near-par free cash flow alignment with net income indicate durable cash conversion. This supports reinvestment, buybacks, debt paydown, and maintains strategic optionality through economic cycles, underpinning long-term financial flexibility and capital allocation.
Read all positive factors
Alarm Key Performance Indicators (KPIs)
Alarm (ALRM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.77B
Dividend YieldN/A
Average Volume (3M)547.39K
Price to Earnings (P/E)23.3
Beta (1Y)1.04
Revenue Growth8.72%
EPS Growth-9.22%
CountryUS
Employees2,051
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)2.38
Shares Outstanding49,090,230
10 Day Avg. Volume410,352
30 Day Avg. Volume547,395
Financial Highlights & Ratios
PEG Ratio3.00
Price to Book (P/B)3.00
Price to Sales (P/S)2.51
P/FCF Ratio18.54
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$62.50Price Target Upside20.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)2.77
Revenue Forecast (FY)$1.07B
Alarm Business Overview & Revenue Model
Company Description
Alarm.com Holdings, Inc. delivers a comprehensive suite of cloud-enabled services tailored for intelligent residential and commercial properties, serving clients across the United States and internationally. The company's operations are divided in...
How the Company Makes Money
Alarm.com primarily makes money by selling subscriptions to its cloud software and services, typically delivered through a network of authorized service providers (e.g., security dealers, integrators, and monitoring/service companies) that offer A...
Alarm Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call highlighted broad-based execution: double-digit SaaS growth (~11% YoY), strong adjusted EBITDA growth (15.7%) and margin expansion (+115 bps), raised full-year guidance, international scale (1M subscribers) and notable EnergyHub operational impact. Lowlights were limited and specific: GAAP net income declined due to lower interest income after debt retirement, free cash flow was modest this quarter due to working capital timing, and new product adoption (commercial fire communicator) and international partner churn present execution risks. Overall, the positive financial performance, raised guidance, and product / market milestones materially outweigh the contained negatives.Positive Updates
SaaS and License Revenue Growth
SaaS and license revenue of $188.8M in Q2, up ~11% year-over-year (CFO reported 11.1% YoY), exceeding the midpoint of guidance by ~$3.2M.
Negative Updates
GAAP Net Income Decline
GAAP net income attributable to common stockholders was ~$24.2M ($0.48 diluted) in Q2, down from ~$34.6M a year ago; primary driver cited was lower interest income following the January retirement of $500M of convertible notes.
Read all updates
Q2-2026 Updates
Positive
Negative
SaaS and License Revenue Growth
SaaS and license revenue of $188.8M in Q2, up ~11% year-over-year (CFO reported 11.1% YoY), exceeding the midpoint of guidance by ~$3.2M.
Read all positive updates
Company Guidance
The company raised its 2026 outlook: Q3 SaaS & license revenue is guided to $189.8–190.0M (≈8.3% growth at the midpoint) and full‑year SaaS & license revenue to $754.0–754.4M (≈9.4% growth at the midpoint, up ≈$4.2M vs. May), total revenue to $1.079–1.089B (including hardware & other of $325–335M, up ≈$15M at the midpoint), and non‑GAAP adjusted EBITDA to $221–223M (up ≈$6.5M at the midpoint) on a path to a ~21% adjusted EBITDA margin exiting 2027; management also projects non‑GAAP adjusted net income of $156–157M (≈$2.92–2.94 per diluted share on ~56.3M shares), a non‑GAAP tax rate of ≈21%, full‑year stock‑based compensation of $34–35M, and expects ~90% conversion of adjusted EBITDA to free cash flow, while continuing buybacks under a $150M authorization (Q2 repurchases ~570K shares for $25M).Alarm Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
67
Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.06B | 1.01B | 939.83M | 881.68M | 842.56M | 748.97M |
| Gross Profit | 672.87M | 668.89M | 613.68M | 556.52M | 499.98M | 443.07M |
| EBITDA | 211.99M | 230.10M | 196.29M | 145.38M | 102.47M | 102.67M |
| Net Income | 117.90M | 132.57M | 124.12M | 81.04M | 56.34M | 52.26M |
Balance Sheet | ||||||
| Total Assets | 1.66B | 2.17B | 2.04B | 1.44B | 1.33B | 1.23B |
| Cash, Cash Equivalents and Short-Term Investments | 479.42M | 960.58M | 1.22B | 696.98M | 622.16M | 710.62M |
| Total Debt | 567.47M | 1.13B | 1.06B | 526.03M | 529.91M | 468.27M |
| Total Liabilities | 746.66M | 1.28B | 1.27B | 714.71M | 706.53M | 605.96M |
| Stockholders Equity | 864.46M | 848.16M | 726.55M | 688.55M | 598.86M | 613.17M |
Cash Flow | ||||||
| Free Cash Flow | 237.16M | 137.05M | 196.28M | 121.79M | 28.26M | 87.73M |
| Operating Cash Flow | 249.71M | 153.33M | 206.41M | 135.97M | 56.90M | 103.16M |
| Investing Cash Flow | -159.23M | -358.48M | -24.68M | -25.97M | -68.32M | -20.36M |
| Financing Cash Flow | -1.10B | -55.01M | 346.43M | -31.86M | -76.32M | 374.37M |
Alarm Technical Analysis
Positive
51.78
Price Trends
50.09
Positive
47.24
Positive
48.42
Positive
Market Momentum
1.82
Positive
59.39
Neutral
57.90
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 51.78 is below the 20-day moving average (MA) of 54.41, above the 50-day MA of 50.09, and above the 200-day MA of 48.42, indicating a bullish trend. The MACD of 1.82 indicates Positive momentum. The RSI at 59.39 is Neutral, neither overbought nor oversold. The STOCH value of 57.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALRM.
Alarm Risk Analysis
Alarm disclosed 66 risk factors in its most recent earnings report. Alarm reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Alarm Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $2.77B | 23.30 | 13.87% | ― | 8.72% | -9.22% | |
73 Outperform | $2.82B | 30.52 | 123.31% | ― | 32.38% | ― | |
71 Outperform | $5.30B | 48.74 | -20.59% | 0.31% | 5.22% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $4.93B | 59.00 | 5.51% | ― | 30.16% | ― | |
59 Neutral | $2.12B | -47.00 | -12.48% | ― | 27.05% | -12.95% | |
55 Neutral | $270.17M | -14.44 | -8.50% | ― | -2.78% | 72.47% |
* Technology Sector Average
ALRM
Alarm
55.46
-2.05
-3.56%
RNG
RingCentral
62.88
33.01
110.52%
GBTG
Global Business Travel Group
9.44
1.57
19.95%
GRND
Grindr
15.87
-0.40
-2.46%
SMRT
SmartRent
1.45
0.09
6.62%
ALKT
Alkami Technology
20.21
-2.38
-10.54%
Alarm Corporate Events
Executive/Board ChangesShareholder Meetings
Alarm.com Shareholders Back Board, Auditors and Executive Pay
Positive
Jun 8, 2026
On June 3, 2026, Alarm.com Holdings, Inc. held its 2026 Annual Meeting of Stockholders, where shareholders elected eight directors to serve until the 2027 annual meeting, confirming continuity in the company’s board leadership. The strong su...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.