Arlo Technologies (ARLO) AI Stock Analysis

• Market Cap: $1.23B
• Dividend Yield: N/A
• Average Volume (3M): 1.21M
• Price to Earnings (P/E): 338.4
• Beta (1Y): 2.03
• Revenue Growth: -2.83%
• EPS Growth: N/A
• Country: US
• Employees: 360
• Sector: Industrials
• Sector Strength: 72
• Industry: Security & Protection Services
• EPS (TTM): 0.22
• Shares Outstanding: 105,992,270
• 10 Day Avg. Volume: 1,193,740
• 30 Day Avg. Volume: 1,212,989
• PEG Ratio: -0.67
• Price to Book (P/B): 11.40
• Price to Sales (P/S): 2.75
• P/FCF Ratio: 21.79
• Enterprise Value/Market Cap: 0.96
• Enterprise Value/Revenue: 2.24
• Enterprise Value/Gross Profit: 5.08
• Enterprise Value/Ebitda: 75.15
• 1Y Price Target: $23.50
• Price Target Upside: 90.44% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 0.78
• Revenue Forecast (FY): $563.20M

• Rating: 68 Neutral
• Price Target: $13.50 ▲(9.40% Upside)
• Action: Reiterated Date: 02/27/26
• Date: Action: Reiterated 02/27/26

The score is driven primarily by improving fundamentals (profitability turning positive, low leverage, and strong recent free cash flow) and a constructive earnings-call backdrop with strong SaaS/ARR and margin expansion. Offsetting these positives are weak technical momentum (below key moving averages, negative MACD) and a demanding valuation (very high P/E, no dividend support).

Positive Factors

Recurring revenue / ARR growth

Rapid ARR and paid-account growth point to a structurally improving recurring revenue base. A growing installed base with higher ARPU makes revenue more predictable, improves lifetime value economics, and supports margin expansion as service mix rises versus one-time hardware sales.

Strong free cash flow generation

Sustained positive operating cash flow and strong FCF provide durable financial flexibility to invest in product R&D, subsidize promotions prudently, and pursue partnerships. Reliable cash generation reduces refinancing risk and supports strategic reinvestment through cycles.

Strategic distribution & platform partnerships

Partnerships with large platforms and service providers expand distribution, lower customer acquisition costs, and embed Arlo into broader smart-home ecosystems. Deeper integration with platform partners can drive recurring subscription adoption and long-term stickiness.

Negative Factors

Declining product revenue

A structural decline in hardware revenue can slow overall top-line growth and weaken acquisition of new users if hardware-led adoption softens. Given hardware historically drives new account adds, sustained product declines increase pressure on marketing efficiency and growth targets.

Negative product gross margins (tariffs/promotions)

Negative product margins from tariffs and promotions directly undermine consolidated profitability. If tariff exposure or ASP deflation persists, the company must rely more on service margins to offset hardware losses, heightening margin concentration and execution risk.

Thin operating/EBITDA margins; recovery early

Very slim operating margins mean small revenue shocks or margin pressure can erase profits. The company's profitability is nascent, so sustaining margin expansion depends on continued service mix gains, cost control, and execution against product margin headwinds.

Arlo Technologies Business Overview & Revenue Model

Company Description

Arlo Technologies, Inc., together with its subsidiaries, provides a cloud-based platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific regions. It combines an intelligent cloud infrastructure and mobile app with various smart connected devices. The company offers Arlo essential indoor camera; Arlo Go 2 LTE/Wi-Fi security camera; Arlo Q and Arlo Q Plus, an indoor wired solution that allows users to monitor their surroundings; and Arlo Go, an LTE-enabled wire-free camera that provides untethered mobile security. It also provides Arlo Baby, a baby monitor with air quality and temperature sensors, motion and audio detection, and advanced night vision; Arlo Chime that pairs with the Arlo Video Doorbell to play a variety of ringtones or act as a siren; Arlo Ultra, an integrated spotlight and crystal-clear two-way audio with advanced noise cancellations camera; Arlo Pro 3, an integrated spotlight with color night vision camera; Arlo Video Doorbell delivers direct-to-mobile video calls and personalized alerts; Arlo Floodlight Camera, a wire-free variant LED camera, as well as Arlo Essential Spotlight; Arlo Ultra 2; Arlo Essential XL Spotlight; Arlo Essential Wire-Free Video Doorbell; and Arlo Pro 4 Wire-Free Spotlight. In addition, it provides Arlo accessories, such as charging accessories, device mounts, and device skins. Further, it offers Arlo app for iOS and Android devices that allow users to connect various devices; and Arlo Secure, with coverage for unlimited cameras and an enhanced emergency response solutions. The company offers its products through retailers, wholesale distributors, broadcast channels, wireless carriers, and security solution providers, as well as through its website. Arlo Technologies, Inc. was incorporated in 2018 and is headquartered in Carlsbad, California.

How the Company Makes Money

Arlo Technologies generates revenue through multiple streams, primarily consisting of hardware sales and subscription services. The company sells its security cameras, doorbells, and other smart home devices directly to consumers through various retail channels and e-commerce platforms. A significant portion of Arlo's income comes from subscription services, including Arlo Smart, which offers enhanced features such as cloud storage, advanced AI detection, and activity zones for a monthly or annual fee. Additionally, Arlo has established partnerships with major retailers and telecom providers to expand its distribution channels and reach a broader customer base, further contributing to its revenue growth.

Arlo Technologies Financial Statement Overview

Summary

Financials show a clear turnaround: revenue has grown to $529M (2025), net income turned positive in 2025 ($14.9M), debt is very low ($6.7M), and recent cash generation is strong (2025 FCF $66.9M). The main constraint is that profitability is still early and operating/EBITDA margins remain thin, making results more sensitive to execution.

Income Statement

Revenue has grown steadily from $357M (2020) to $529M (2025), with modest growth in 2024–2025. Profitability has improved materially: the company moved from sizable losses in 2020–2024 to positive net income in 2025 ($14.9M, ~2.8% net margin). Gross margin also expanded meaningfully (about 15.5% in 2020 to ~44.0% in 2025), supporting the turnaround. The key weakness is that operating profitability remains thin (EBITDA margin ~1.1% in 2025) and the business only recently returned to profitability after multiple loss years.

Balance Sheet

Leverage is low and improving: total debt fell sharply to $6.7M in 2025 and debt relative to equity is modest (~0.05). Equity has increased versus 2024, and returns improved to a positive level in 2025 after several years of negative returns. The main watch-out is that the asset base has fluctuated over time and profitability is still early in its recovery, which could limit balance-sheet strengthening if margins slip.

Cash Flow

Cash generation is a standout. Operating cash flow and free cash flow are strongly positive in 2023–2025, reaching $78.7M and $66.9M in 2025, respectively, with strong free cash flow growth in 2025. This is a meaningful improvement versus negative cash flow in 2020–2022. A constraint is that cash flow can be volatile historically (notably negative in 2020–2022), so durability through a cycle remains the key question despite the recent strength.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	529.30M	510.89M	491.18M	490.41M	435.14M
Gross Profit	232.84M	187.50M	167.56M	136.03M	108.03M
EBITDA	6.07M	-31.69M	-20.24M	-52.11M	-45.05M
Net Income	14.93M	-30.50M	-22.04M	-56.63M	-56.03M
Balance Sheet
Total Assets	310.55M	298.40M	285.54M	272.20M	347.49M
Cash, Cash Equivalents and Short-Term Investments	166.43M	151.45M	136.50M	113.72M	175.75M
Total Debt	6.74M	18.36M	17.02M	23.47M	26.08M
Total Liabilities	182.71M	197.49M	182.26M	184.51M	234.84M
Stockholders Equity	127.84M	100.91M	103.28M	87.69M	112.65M
Cash Flow
Free Cash Flow	66.90M	48.62M	35.45M	-47.97M	-25.46M
Operating Cash Flow	78.72M	51.31M	38.30M	-45.96M	-23.20M
Investing Cash Flow	27.75M	10.84M	-50.69M	-31.77M	17.73M
Financing Cash Flow	-42.07M	-40.77M	-15.14M	-13.94M	-4.97M

Arlo Technologies Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 12.34
• 50DMA: Negative
• 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 ARLO, the sentiment is Negative. The current price of 12.34 is above the 20-day moving average (MA) of 12.08, below the 50-day MA of 13.08, and below the 200-day MA of 15.52, indicating a bearish trend. The MACD of -0.48 indicates Negative momentum. The RSI at 43.56 is Neutral, neither overbought nor oversold. The STOCH value of 47.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARLO.

Arlo Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NSSC	78 Outperform	$1.64B	34.84	26.42%	1.29%	-2.28%	-9.94%
BAER	69 Neutral	$139.97M	-4.88	8.75%	―	54.35%	70.17%
ARLO	68 Neutral	$1.23B	338.35	3.80%	―	-2.83%	―
SNT	67 Neutral	$78.14M	―	―	―	―	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
EVLV	48 Neutral	$881.82M	-14.54	-51.67%	―	41.61%	-1.76%
KSCP	41 Neutral	$46.15M	-0.62	-164.48%	―	5.50%	51.32%