Alarm (ALRM) AI Stock Analysis

• Market Cap: $2.84B
• Dividend Yield: N/A
• Average Volume (3M): 312.19K
• Price to Earnings (P/E): 24.1
• Beta (1Y): 1.07
• Revenue Growth: 6.72%
• EPS Growth: 43.44%
• Country: US
• Employees: 2,020
• Sector: Technology
• Sector Strength: 86
• Industry: Software - Application
• EPS (TTM): 0.54
• Shares Outstanding: 49,742,010
• 10 Day Avg. Volume: 332,508
• 30 Day Avg. Volume: 312,195
• 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: 0.89
• Enterprise Value/Revenue: 0.68
• Enterprise Value/Gross Profit: 4.06
• Enterprise Value/Ebitda: 3.50
• 1Y Price Target: $70.57
• Price Target Upside: 23.81% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 76 Outperform
• Price Target: $65.00 ▲(14.04%Upside)

Alarm's strong financial performance and positive earnings call contribute significantly to its score, despite neutral technical indicators and valuation. The company's strategic initiatives and raised guidance support a positive outlook, although challenges in the residential market and potential tariff impacts present risks.

Positive Factors

Financial Performance

Alarm reported solid first-quarter results across the board.

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%.

SaaS Revenue Growth

The company's SaaS revenue growth is driven by high retention rates of about 98% and strong performance in the North America residential market.

Negative Factors

Deceleration Headwinds

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

Tariff Impact

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. (ALRM) is a technology company specializing in the development and provision of cloud-based security and smart home automation solutions. The company operates primarily in the sectors of home security, video monitoring, energy management, and home automation, offering a suite of products and services designed to enhance the safety and convenience of residential and business environments. Alarm.com's platform integrates with a wide range of devices, enabling users to monitor and control their security systems remotely via mobile apps and web interfaces.

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
EBITDA	184.67M	196.29M	145.38M	102.47M	102.67M	111.16M
Net Income	128.47M	124.12M	81.04M	56.34M	52.26M	77.85M
Balance Sheet
Total Assets	2.08B	2.04B	1.44B	1.33B	1.23B	731.69M
Cash, Cash Equivalents and Short-Term Investments	1.19B	1.22B	696.98M	622.16M	710.62M	253.46M
Total Debt	1.06B	1.06B	526.03M	529.91M	468.27M	157.67M
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: 57.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• 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 is below the 20-day moving average (MA) of 57.67, above the 50-day MA of 55.88, and below the 200-day MA of 58.07, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 52.76 is Neutral, neither overbought nor oversold. The STOCH value of 25.27 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	76 Outperform	$2.84B	24.11	17.27%	―	6.72%	43.44%
GTM	74 Outperform	$3.20B	81.83	2.23%	―	-3.12%	-37.59%
LIF	65 Neutral	$4.73B	667.42	3.12%	―	26.15%	―
NCNO	65 Neutral	$3.08B	―	-2.75%	―	13.39%	16.12%
ALKT	63 Neutral	$3.17B	―	-11.33%	―	26.55%	38.37%
Sector *	63 Neutral	$32.30B	6.54	-12.31%	1.93%	5.64%	-21.98%
ALIT	60 Neutral	$2.90B	―	-0.82%	2.97%	-26.04%	85.84%

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.