Alarm.com Holdings Inc. (ALRM)
NASDAQ:ALRM
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Alarm
(NASDAQ:ALRM)
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Rating:70Outperform
Price Target:
$50.00
▲(15.18% Upside)
Action:Reiterated
Date:06/09/26
The score is driven primarily by solid financial performance (strong margins and improved leverage) and a constructive earnings update (raised SaaS and EBITDA guidance with high retention). Offsetting factors are only moderate technical strength (still below longer-term moving averages) and hardware-related uncertainty, while valuation appears reasonable at the provided P/E with no dividend support.
Positive Factors
High SaaS growth & revenue retention
Double-digit SaaS growth combined with very high revenue retention (~95.4%) drives predictable, recurring revenue and lowers churn risk. The partner-led distribution scales acquisition and supports upsell of higher-value services, underpinning steady subscription cash flows over coming quarters.
Negative Factors
Memory supply-chain cost inflation
A structural shift in memory demand (OEMs moving to HBM) tightens supply for standard memory used in cameras, elevating component costs. Persistent higher input costs can compress hardware gross margins and force price increases that may reduce hardware demand over several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
High SaaS growth & revenue retention
Double-digit SaaS growth combined with very high revenue retention (~95.4%) drives predictable, recurring revenue and lowers churn risk. The partner-led distribution scales acquisition and supports upsell of higher-value services, underpinning steady subscription cash flows over coming quarters.
Read all positive factors
Alarm (ALRM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.20B
Dividend YieldN/A
Average Volume (3M)552.11K
Price to Earnings (P/E)17.2
Beta (1Y)1.03
Revenue Growth8.60%
EPS Growth-0.68%
CountryUS
Employees2,020
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)2.58
Shares Outstanding49,460,583
10 Day Avg. Volume584,887
30 Day Avg. Volume552,110
Financial Highlights & Ratios
PEG Ratio2.99
Price to Book (P/B)3.00
Price to Sales (P/S)2.51
P/FCF Ratio18.54
Enterprise Value/Market Cap1.05
Enterprise Value/Revenue2.22
Enterprise Value/Gross Profit3.51
Enterprise Value/Ebitda10.31
Forecast
1Y Price Target
$63.50Price Target Upside46.28% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)2.79
Revenue Forecast (FY)$1.06B
Alarm Business Overview & Revenue Model
Company Description
Alarm.com Holdings, Inc. delivers a comprehensive suite of cloud-enabled services tailored for intelligent residential and commercial properties, serving clients across the United States and internationally. The company's operations are divided in...
How the Company Makes Money
Alarm.com primarily makes money by selling access to its cloud software platform and associated services through a partner-driven model, where professional service providers (e.g., security dealers, integrators, and service/monitoring providers) u...
Alarm 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 conveyed a broadly positive operational and financial picture: strong SaaS growth (+10.8% YoY), very high revenue retention (~95.4%), total revenue and EBITDA beats, raised SaaS and EBITDA guidance, healthy cash and share repurchase activity, and clear product momentum in EnergyHub and OpenEye AI offerings. Offsetting these positives are near-term headwinds in hardware driven by memory cost inflation and the Supreme Court tariff ruling (reducing tariff pass-through revenue), a cautious hardware outlook, a decline in GAAP net income due to lower interest income, and temporary installation disruptions from extreme weather. Management signaled confidence in long-term opportunities and maintained targets (including an exit-2027 adjusted EBITDA margin target ~21%), while acknowledging ongoing hardware and supply-chain uncertainty.Positive Updates
SaaS and License Revenue Growth
SaaS and license revenue of $181.5M, up 10.8% year-over-year and $5.6M above the midpoint of guidance; full-year SaaS guidance raised to $749.5M–$750.5M (approximately +$6M at midpoint).
Negative Updates
Memory Supply-Chain Volatility and Cost Inflation
Ongoing supply chain volatility for standard memory as OEMs shift production to HBM for AI data centers has driven substantial cost increases for memory used in cameras and other products; company expects these challenges to continue until the memory market corrects and notes potential price increases with uncertain demand impact.
Read all updates
Q1-2026 Updates
Positive
Negative
SaaS and License Revenue Growth
SaaS and license revenue of $181.5M, up 10.8% year-over-year and $5.6M above the midpoint of guidance; full-year SaaS guidance raised to $749.5M–$750.5M (approximately +$6M at midpoint).
Read all positive updates
Company Guidance
Alarm.com provided Q2 and full‑year 2026 guidance calling for Q2 SaaS & license revenue of $185.5–$185.7M and raised full‑year SaaS & license revenue to $749.5–$750.5M (≈+$6M at the midpoint); full‑year total revenue is guided to $1,059.5–$1,070.5M, which includes hardware & other of $310–$320M (the hardware midpoint was modestly lowered due to the late‑Feb Supreme Court tariff ruling and ongoing memory‑market cost/availability uncertainty, with roughly $5M less in tariff pass‑throughs expected in H2 versus prior outlook once tariffs are adjusted toward end of Q2). They raised FY non‑GAAP adjusted EBITDA to $215–$216M (midpoint implies a 20.2% adjusted EBITDA margin, +30 bps y/y and +$1.5M at the midpoint), and expect non‑GAAP adjusted net income of $151.5–$152.0M or $2.81–$2.82 per diluted share (based on ~56.9M weighted average diluted shares, ~10% EPS growth), with a non‑GAAP tax rate of ~21% and FY stock‑based compensation of $35–$37M.Alarm Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
70
Positive
Cash Flow
66
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.04B | 1.01B | 939.83M | 881.68M | 842.56M | 748.97M |
| Gross Profit | 657.63M | 638.07M | 613.68M | 556.52M | 499.98M | 443.07M |
| EBITDA | 223.70M | 232.74M | 196.29M | 145.38M | 102.47M | 102.67M |
| Net Income | 128.21M | 132.57M | 124.12M | 81.04M | 56.34M | 52.26M |
Balance Sheet | ||||||
| Total Assets | 1.64B | 2.17B | 2.04B | 1.44B | 1.33B | 1.23B |
| Cash, Cash Equivalents and Short-Term Investments | 497.45M | 960.58M | 1.22B | 696.98M | 622.16M | 710.62M |
| Total Debt | 566.73M | 1.13B | 1.06B | 526.03M | 529.91M | 468.27M |
| Total Liabilities | 739.85M | 1.28B | 1.27B | 714.71M | 706.53M | 605.96M |
| Stockholders Equity | 859.81M | 848.16M | 726.55M | 688.55M | 598.86M | 613.17M |
Cash Flow | ||||||
| Free Cash Flow | 168.21M | 137.05M | 196.28M | 121.79M | 28.26M | 87.73M |
| Operating Cash Flow | 179.91M | 153.33M | 206.41M | 135.97M | 56.90M | 103.16M |
| Investing Cash Flow | -316.33M | -358.48M | -24.68M | -25.97M | -68.32M | -20.36M |
| Financing Cash Flow | -554.34M | -55.01M | 346.43M | -31.86M | -76.32M | 374.37M |
Alarm Technical Analysis
Negative
43.41
Price Trends
44.89
Negative
45.63
Negative
48.70
Negative
Market Momentum
0.22
Positive
45.35
Neutral
36.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALRM, the sentiment is Negative. The current price of 43.41 is below the 20-day moving average (MA) of 45.11, below the 50-day MA of 44.89, and below the 200-day MA of 48.70, indicating a bearish trend. The MACD of 0.22 indicates Positive momentum. The RSI at 45.35 is Neutral, neither overbought nor oversold. The STOCH value of 36.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALRM.
Alarm Risk Analysis
Alarm disclosed 66 risk factors in its most recent earnings report. Alarm 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
Alarm Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $2.94B | 35.15 | -16.71% | ― | 4.90% | ― | |
70 Outperform | $2.20B | 17.17 | 15.39% | ― | 8.60% | -0.68% | |
67 Neutral | $2.37B | 25.90 | 123.31% | ― | 31.02% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $4.88B | 55.81 | 5.79% | ― | 20.67% | ― | |
59 Neutral | $1.57B | -31.36 | -13.96% | ― | 32.73% | -27.71% | |
48 Neutral | $217.91M | -8.72 | -10.61% | ― | -9.70% | 61.30% |
* Technology Sector Average
ALRM
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Alarm Corporate Events
Executive/Board ChangesShareholder Meetings
Alarm.com Shareholders Back Board, Auditors and Executive Pay
Positive
Jun 8, 2026
On June 3, 2026, Alarm.com Holdings, Inc. held its 2026 Annual Meeting of Stockholders, where shareholders elected eight directors to serve until the 2027 annual meeting, confirming continuity in the company’s board leadership. The strong su...
Business Operations and StrategyExecutive/Board Changes
Alarm.com President Shifts to Senior Advisor Role
Neutral
Mar 18, 2026
Alarm.com Holdings, Inc. announced that, effective March 12, 2026, Jeff Bedell will temporarily step down from his role as President, Venture Businesses and Corporate Strategy due to a personal family matter requiring his attention. He will remain...
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.