Alarm (ALRM) AI Stock Analysis

• Market Cap: $2.97B
• Dividend Yield: N/A
• Average Volume (3M): 329.82K
• Price to Earnings (P/E): 24.8
• Beta (1Y): 1.06
• Revenue Growth: 6.72%
• EPS Growth: 43.44%
• Country: US
• Employees: 2,020
• Sector: Technology
• Sector Strength: 84
• Industry: Software - Application
• EPS (TTM): 0.54
• Shares Outstanding: 49,742,010
• 10 Day Avg. Volume: 296,610
• 30 Day Avg. Volume: 329,823
• PEG Ratio: 6.08
• Price to Book (P/B): 4.36
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 92.32
• Enterprise Value/Market Cap: 0.85
• Enterprise Value/Revenue: 0.68
• Enterprise Value/Gross Profit: 4.06
• Enterprise Value/Ebitda: 3.50
• 1Y Price Target: $70.57
• Price Target Upside: 22.77% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 75 Outperform
• Price Target: $66.00 ▲(14.82%Upside)

Alarm.com's strong financial performance and positive earnings call are the primary drivers of its score, reflecting robust growth and effective management. While technical indicators and valuation suggest moderate potential, positive corporate events bolster the company's strategic direction.

Positive Factors

Financial Performance

The company's 4Q24 results exceeded expectations with SaaS and license revenue of $165.7 million, marking a 12% year-over-year increase.

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%.

Revenue Growth

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

Negative Factors

Revenue Deceleration

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

Tariff Policies

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.com generates revenue primarily through the sale of its software-as-a-service (SaaS) platform to service providers, who then offer it to end users as part of their security and automation solutions. The company's key revenue streams include subscription fees for its cloud services, licensing fees from its technology partners, and hardware sales for its compatible devices. Alarm.com also benefits from strategic partnerships with security dealers and service providers, who help expand its market presence and customer base. Additionally, the company leverages its platform's scalability to explore new market opportunities within the Internet of Things (IoT) ecosystem, further driving revenue growth.

Alarm Financial Statement Overview

Summary

Alarm.com demonstrates strong financial health with high revenue growth, solid profit margins, and a stable balance sheet. While cash flow management has room for improvement, the overall financial position is sound, with effective leverage management and consistent profitability.

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
955.37M	939.83M	881.68M	842.56M	748.97M	618.00M
	Gross Profit
620.42M	613.68M	556.52M	499.98M	443.07M	390.57M
	EBIT
119.47M	108.55M	66.83M	51.04M	61.57M	56.30M
	EBITDA
184.67M	196.29M	145.38M	102.47M	102.67M	111.16M
	Net Income Common Stockholders
128.47M	124.12M	81.04M	56.34M	52.26M	77.85M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.19B	1.22B	696.98M	622.16M	710.62M	253.46M
	Total Assets
2.08B	2.04B	1.44B	1.33B	1.23B	731.69M
	Total Debt
1.06B	1.06B	526.03M	529.91M	468.27M	157.67M
	Net Debt
-122.82M	-163.99M	-170.96M	-92.26M	-242.35M	-95.79M
	Total Liabilities
1.27B	1.27B	714.71M	706.53M	605.96M	253.24M
	Stockholders Equity
759.60M	726.55M	688.55M	598.86M	613.17M	467.75M
Cash Flow		Free Cash Flow
166.67M	196.28M	121.79M	28.26M	87.73M	81.59M
	Operating Cash Flow
180.62M	206.41M	135.97M	56.90M	103.16M	102.08M
	Investing Cash Flow
-75.90M	-24.68M	-25.97M	-68.32M	-20.36M	-20.27M
	Financing Cash Flow
336.60M	346.43M	-31.86M	-76.32M	374.37M	52.02M

Alarm Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 57.48
• 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 ALRM, the sentiment is Positive. The current price of 57.48 is below the 20-day moving average (MA) of 58.22, above the 50-day MA of 55.14, and below the 200-day MA of 58.17, indicating a bullish trend. The MACD of 0.81 indicates Positive momentum. The RSI at 56.14 is Neutral, neither overbought nor oversold. The STOCH value of 77.53 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	75 Outperform	$2.97B	24.80	17.27%	―	6.72%	43.44%
GTM	71 Outperform	$3.33B	83.46	2.23%	―	-3.12%	-37.59%
LIF	65 Neutral	$4.78B	672.67	3.12%	―	26.15%	―
ALKT	64 Neutral	$3.06B	―	-11.33%	―	26.55%	38.37%
NCNO	64 Neutral	$3.15B	―	-2.75%	―	13.39%	16.12%
ALIT	62 Neutral	$2.93B	―	-0.82%	2.94%	-26.04%	85.84%
Sector *	62 Neutral	$11.93B	10.60	-7.51%	3.00%	7.40%	-8.09%

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.

Alarm.com Appoints Kevin Bradley as New CFO

On March 13, 2025, Alarm.com Holdings, Inc. announced the appointment of Kevin Bradley as its Chief Financial Officer, effective March 14, 2025. Mr. Bradley, who has been with the company since 2009, has held various roles in accounting and finance, most recently serving as Vice President of Financial Planning and Analysis. His promotion is expected to strengthen the company’s financial leadership, as he brings extensive experience in corporate strategy and financial planning. This move is anticipated to support Alarm.com’s continued growth and diversification in the connected property technology industry.