Arlo Technologies (ARLO) AI Stock Analysis

• Market Cap: $1.52B
• Dividend Yield: N/A
• Average Volume (3M): 1.34M
• Price to Earnings (P/E): 408.0
• Beta (1Y): 1.95
• Revenue Growth: -2.83%
• EPS Growth: N/A
• Country: US
• Employees: 360
• Sector: Industrials
• Sector Strength: 72
• Industry: Security & Protection Services
• EPS (TTM): 0.16
• Shares Outstanding: 105,992,270
• 10 Day Avg. Volume: 1,436,847
• 30 Day Avg. Volume: 1,339,183
• PEG Ratio: -1.24
• Price to Book (P/B): 10.94
• Price to Sales (P/S): 2.16
• P/FCF Ratio: 22.70
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 3.35
• Enterprise Value/Gross Profit: 8.06
• Enterprise Value/Ebitda: 294.26
• 1Y Price Target: $23.50
• Price Target Upside: 63.65% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 0.65
• Revenue Forecast (FY): $521.85M

• Rating: 59 Neutral
• Price Target: $15.50 ▲(7.94% Upside)

Arlo Technologies' overall stock score is driven by strong earnings call performance and financial stability, but is weighed down by poor technical indicators and high valuation concerns. The company shows potential for growth, but operational efficiency and profitability need improvement.

Positive Factors

SaaS Growth

The significant increase in paid accounts and ARR growth of 34% year-over-year highlights Arlo's successful SaaS strategy, indicating strong customer acquisition and retention, which is crucial for long-term revenue stability and growth.

Product Launch Success

The successful execution of a major product launch with significant sales growth demonstrates Arlo's innovation and market responsiveness, enhancing its competitive position and supporting future revenue streams.

Financial Position

A strong cash position and record free cash flow generation provide Arlo with financial flexibility to invest in growth opportunities and weather potential market challenges, reinforcing its long-term financial health.

Negative Factors

Product Revenue Decline

The decline in product revenue reflects challenges in maintaining hardware sales amidst industry-wide ASP declines, which could impact overall revenue growth and necessitate strategic adjustments.

Negative Product Margins

Negative product margins due to tariffs and pricing pressures highlight cost management challenges, potentially affecting profitability and requiring strategic cost optimization efforts.

Profitability Challenges

Low net and negative EBIT margins indicate ongoing operational efficiency issues, which could hinder Arlo's ability to achieve sustainable profitability and necessitate operational improvements.

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

Arlo Technologies shows strong revenue growth and improved gross margins, indicating positive business momentum. The balance sheet is stable with low leverage, but profitability remains a challenge. Cash flow management shows improvement, though there are areas for enhancement.

Income Statement

Arlo Technologies has shown a strong revenue growth rate of 36.7% in the TTM, indicating a positive trajectory. The gross profit margin improved to 41.6%, reflecting better cost management. However, the net profit margin remains low at 0.8%, and EBIT margin is negative, suggesting challenges in operational efficiency.

Balance Sheet

The company maintains a low debt-to-equity ratio of 0.056, indicating low leverage and financial stability. Return on equity is modest at 3.8%, showing limited profitability. The equity ratio stands at 36.8%, suggesting a balanced capital structure.

Cash Flow

Operating cash flow has improved, with a coverage ratio of 0.31, indicating better cash generation relative to net income. Free cash flow to net income ratio is strong at 0.83, though free cash flow growth is slightly negative, highlighting potential cash flow management issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	509.57M	510.89M	491.18M	490.41M	435.14M	357.15M
Gross Profit	212.16M	187.50M	167.56M	136.03M	108.03M	55.39M
EBITDA	5.81M	-31.69M	-20.24M	-52.11M	-45.05M	-94.66M
Net Income	4.30M	-30.50M	-22.04M	-56.63M	-56.03M	-101.25M
Balance Sheet
Total Assets	350.87M	298.40M	285.54M	272.20M	347.49M	413.97M
Cash, Cash Equivalents and Short-Term Investments	165.54M	151.45M	136.50M	113.72M	175.75M	206.12M
Total Debt	7.21M	18.36M	17.02M	23.47M	26.08M	29.43M
Total Liabilities	221.64M	197.49M	182.26M	184.51M	234.84M	280.20M
Stockholders Equity	129.23M	100.91M	103.28M	87.69M	112.65M	133.77M
Cash Flow
Free Cash Flow	54.55M	48.62M	35.45M	-47.97M	-25.46M	-50.42M
Operating Cash Flow	65.62M	51.31M	38.30M	-45.96M	-23.20M	-46.53M
Investing Cash Flow	-30.82M	10.84M	-50.69M	-31.77M	17.73M	-3.98M
Financing Cash Flow	-29.48M	-40.77M	-15.14M	-13.94M	-4.97M	-23.00K

Arlo Technologies Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 14.36
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 14.36 is below the 20-day moving average (MA) of 15.45, below the 50-day MA of 16.83, and below the 200-day MA of 14.68, indicating a bearish trend. The MACD of -1.09 indicates Positive momentum. The RSI at 40.15 is Neutral, neither overbought nor oversold. The STOCH value of 48.24 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	77 Outperform	$1.45B	33.19	25.03%	1.30%	-2.28%	-9.94%
BAER	65 Neutral	$99.98M	―	8.75%	―	54.35%	70.17%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
SNT	62 Neutral	$83.51M	―	―	―	―	―
ARLO	59 Neutral	$1.52B	407.95	3.80%	―	-2.83%	―
EVLV	45 Neutral	$1.09B	―	-51.67%	―	41.61%	-1.76%
KSCP	41 Neutral	$55.70M	―	-164.48%	―	5.50%	51.32%

Arlo Technologies Corporate Events

Arlo Technologies Reports Strong Q3 Growth Amid Challenges

Arlo Technologies’ recent earnings call highlighted a robust performance, marked by significant growth in SaaS and service revenue, alongside successful product launches and improved profitability. However, the company also faces challenges with declining product revenue and negative gross margins due to tariffs and promotional activities.

Arlo Technologies Reports Strong Q3 2025 Results

Arlo Technologies, Inc., headquartered in Carlsbad, California, is a prominent player in the smart home security industry, offering advanced security solutions powered by AI and cloud services. The company is known for its innovative wireless security cameras and subscription services like Arlo Secure and Arlo Safe.