Arlo Technologies (ARLO)
NYSE:ARLO
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Arlo Technologies
(NYSE:ARLO)
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Rating:76Outperform
Price Target:
$15.50
▲(2.04% Upside)
Action:Reiterated
Date:05/12/26
Overall score is driven primarily by improved financial fundamentals (profitability turnaround, strong free cash flow, and a low-leverage balance sheet) and a very positive earnings call with strong subscription/ARR momentum and reaffirmed outlook. Offsetting factors are a weaker technical setup (trading below major moving averages with softer momentum) and only moderate valuation support given a ~24.6 P/E and no dividend.
Positive Factors
Strong cash generation
Consistent, material free cash flow provides durable internal funding for R&D, partner integrations, M&A (e.g., Aloe Care), and the $50M buyback authorization. Strong cash conversion lowers refinancing risk and supports sustained investment even if hardware sales fluctuate.
Negative Factors
Tariff headwind
Material tariffs are a structural cost overhang that directly erodes product margins and are subject to uncertain relief timing. Combined with elevated component cost volatility, tariff exposure can persistently compress hardware profitability and slow margin convergence.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistent, material free cash flow provides durable internal funding for R&D, partner integrations, M&A (e.g., Aloe Care), and the $50M buyback authorization. Strong cash conversion lowers refinancing risk and supports sustained investment even if hardware sales fluctuate.
Read all positive factors
Arlo Technologies (ARLO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.42B
Dividend YieldN/A
Average Volume (3M)1.46M
Price to Earnings (P/E)24.6
Beta (1Y)1.88
Revenue Growth10.85%
EPS GrowthN/A
CountryUS
Employees360
SectorIndustrials
Sector Strength72
IndustrySecurity & Protection Services
Share Statistics
EPS (TTM)0.29
Shares Outstanding108,609,820
10 Day Avg. Volume2,126,312
30 Day Avg. Volume1,459,495
Financial Highlights & Ratios
PEG Ratio-0.67
Price to Book (P/B)11.40
Price to Sales (P/S)2.75
P/FCF Ratio21.79
Enterprise Value/Market Cap0.87
Enterprise Value/Revenue2.21
Enterprise Value/Gross Profit4.89
Enterprise Value/Ebitda46.37
Forecast
1Y Price Target
$21.40Price Target Upside40.88% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)0.83
Revenue Forecast (FY)$565.85M
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 sm...
How the Company Makes Money
Arlo primarily makes money through a mix of (1) product sales and (2) subscription and service revenue.
1) Product revenue (hardware): Arlo sells smart security devices such as indoor/outdoor cameras, video doorbells, and related accessories. Re...
Arlo Technologies Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 06, 2026
Earnings Call Sentiment Positive
The call presented a clearly positive operational and financial story: record revenue and EPS, strong subscriber/addition metrics, rising ARPU and ARR, substantially improved gross margins and adjusted EBITDA, healthy free cash flow and a strong cash position. Management also highlighted multiple strategic partnerships (ADT, Samsung, Comcast) and an acquisition (Aloe Care) that expand future TAM and monetization pathways. Offsetting risks are manageable near-term headwinds (tariffs and rising memory costs), higher operating expense from investment and some inventory buildup, as well as timing uncertainty for tariff relief and the full commercial impact of larger partnerships (notably Comcast which is expected to be material in 2027). Overall, positives substantially outweigh the headwinds.Positive Updates
Record Revenue and Strong YoY Growth
Total revenue of $150.4M, up 26% year-over-year, beating the top end of guidance for the quarter.
Negative Updates
Tariff Headwind Weighing on Product Margins
Tariffs created an estimated ~430 basis point headwind; product non-GAAP gross margin was negative 2.8% in the quarter (but would be +1.5% excluding tariffs). Eligibility/timing for tariff relief claims remains uncertain.
Read all updates
Q1-2026 Updates
Positive
Negative
Record Revenue and Strong YoY Growth
Total revenue of $150.4M, up 26% year-over-year, beating the top end of guidance for the quarter.
Read all positive updates
Company Guidance
For Q2 Arlo guided total revenue of $145–$155 million and non‑GAAP net income per diluted share of $0.17–$0.23, saying subscriptions & services revenue should continue to grow while product revenue remains solid as strategic partner demand ramps and the company invests to integrate partners and support acquisitions like Aloe Care; management also reiterated confidence in achieving its full‑year 2026 outlook for subscriptions & services revenue, total revenue and EPS. For context, Q1 included 318,000 net paid account additions (surpassing 6.0 million paid accounts), ARR of $357 million (up 29% YoY), ARPU of $15.60 (up 16% YoY), subscriptions & services revenue of $90 million (60% of total, +31% YoY), total revenue of ~$150.4 million (+26% YoY), consolidated non‑GAAP gross margin ~50% (up 460 bps YoY), subscriptions/services gross margin 85.4%, product revenue $60.3 million, adjusted EBITDA $30.4 million (20% margin, +85% YoY), non‑GAAP EPS $0.28, free cash flow $25.4 million (~17% margin), cash and short‑term investments $167.5 million, AR receivable $52 million (DSO 31 days) and inventory $44 million (≈6x turns).Arlo Technologies Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
88
Very Positive
Cash Flow
83
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 560.61M | 529.30M | 510.89M | 491.18M | 490.41M | 435.14M |
| Gross Profit | 252.78M | 232.84M | 187.50M | 167.56M | 136.03M | 108.03M |
| EBITDA | 26.66M | 19.60M | -31.69M | -20.24M | -52.11M | -45.05M |
| Net Income | 30.64M | 14.93M | -30.50M | -22.04M | -56.63M | -56.03M |
Balance Sheet | ||||||
| Total Assets | 360.19M | 310.55M | 298.40M | 285.54M | 272.20M | 347.49M |
| Cash, Cash Equivalents and Short-Term Investments | 167.50M | 166.43M | 151.45M | 136.50M | 113.72M | 175.75M |
| Total Debt | 6.23M | 6.74M | 18.36M | 17.02M | 23.47M | 26.08M |
| Total Liabilities | 200.79M | 182.71M | 197.49M | 182.26M | 184.51M | 234.84M |
| Stockholders Equity | 159.40M | 127.84M | 100.91M | 103.28M | 87.69M | 112.65M |
Cash Flow | ||||||
| Free Cash Flow | 64.22M | 66.90M | 48.62M | 35.45M | -47.97M | -25.46M |
| Operating Cash Flow | 75.67M | 78.72M | 51.31M | 38.30M | -45.96M | -23.20M |
| Investing Cash Flow | 27.77M | 27.75M | 10.84M | -50.69M | -31.77M | 17.73M |
| Financing Cash Flow | -34.81M | -42.07M | -40.77M | -15.14M | -13.94M | -4.97M |
Arlo Technologies Technical Analysis
Negative
15.19
Price Trends
14.01
Negative
13.59
Negative
15.02
Negative
Market Momentum
-0.40
Positive
40.36
Neutral
17.22
Positive
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 15.19 is above the 20-day moving average (MA) of 13.77, above the 50-day MA of 14.01, and above the 200-day MA of 15.02, indicating a bearish trend. The MACD of -0.40 indicates Positive momentum. The RSI at 40.36 is Neutral, neither overbought nor oversold. The STOCH value of 17.22 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARLO.
Arlo Technologies Risk Analysis
Arlo Technologies disclosed 58 risk factors in its most recent earnings report. Arlo Technologies 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
Arlo Technologies Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $1.42B | 24.56 | 22.92% | ― | 10.85% | ― | |
71 Outperform | $1.31B | -861.44 | 20.86% | 1.29% | 8.83% | -16.34% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $62.16M | 35.03 | 7.70% | ― | ― | ― | |
51 Neutral | $1.06B | -53.46 | -33.53% | ― | 40.54% | 20.94% | |
48 Neutral | $112.39M | -0.87 | -21.22% | ― | 6.39% | 0.74% | |
45 Neutral | $42.50M | -1.40 | -143.53% | ― | 25.86% | 68.12% |
* Industrials Sector Average
ARLO
Arlo Technologies
12.73
-0.57
-4.29%
SNT
Senstar Technologies
2.70
-1.04
-27.91%
NSSC
Napco Security Technologies
36.69
9.01
32.55%
EVLV
Evolv Technologies Holdings
6.00
0.29
5.08%
BAER
Bridger Aerospace Group Holdings
1.94
0.62
46.97%
KSCP
Knightscope Inc Class A
2.88
-2.94
-50.52%
Arlo Technologies Corporate Events
Business Operations and StrategyRegulatory Filings and Compliance
Arlo Technologies Updates Bylaws, Enhancing Corporate Governance Framework
Positive
Apr 7, 2026
On April 3, 2026, Arlo Technologies, Inc.’s board adopted amended and restated bylaws that modernize corporate governance mechanics, expand use of electronic communications, and clarify procedures for stockholder meetings and board and commi...
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.