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Arlo Technologies
(NYSE:ARLO)
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Rating:78Outperform
Price Target:
$15.00
▲(12.61% Upside)
Action:Reiterated
Date:08/07/26
ARLO scores well primarily on improving financial fundamentals (profitability inflection, strong free cash flow, and a low-debt balance sheet) and supportive technical momentum. The main offsets are a premium valuation (P/E ~51) and earnings-call risks tied to intentionally negative product margins, some reliance on tariff refunds, and inventory/turns deterioration.
Positive Factors
Recurring Subscription Growth
Subscription growth strengthens revenue visibility and customer lifetime economics. Rising ARR, paid accounts, ARPU and LTV indicate expanding household penetration and deeper monetization of Arlo’s installed device base.
Negative Factors
Structurally Negative Product Margins
Selling hardware below cost as customer acquisition spending places ongoing pressure on consolidated margins and cash conversion. The strategy depends on reliably converting device buyers into higher-margin subscribers over time.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring Subscription Growth
Subscription growth strengthens revenue visibility and customer lifetime economics. Rising ARR, paid accounts, ARPU and LTV indicate expanding household penetration and deeper monetization of Arlo’s installed device base.
Read all positive factors
Arlo Technologies (ARLO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.43B
Dividend YieldN/A
Average Volume (3M)1.18M
Price to Earnings (P/E)45.3
Beta (1Y)1.91
Revenue Growth15.65%
EPS GrowthN/A
CountryUS
Employees376
SectorIndustrials
Sector Strength72
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.29
Shares Outstanding107,613,304
10 Day Avg. Volume921,256
30 Day Avg. Volume1,182,336
Financial Highlights & Ratios
PEG Ratio-0.69
Price to Book (P/B)11.40
Price to Sales (P/S)2.75
P/FCF Ratio21.79
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$21.20Price Target Upside59.16% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)0.84
Revenue Forecast (FY)$565.85M
Arlo Technologies Business Overview & Revenue Model
Company Description
Arlo Technologies, Inc. delivers a comprehensive, cloud-centric smart security ecosystem across the Americas, Europe, the Middle East, Africa, and Asia Pacific regions. This system seamlessly integrates an intelligent cloud backbone and a user-fri...
How the Company Makes Money
Arlo primarily makes money through (1) product sales and (2) subscription and service revenue. Product revenue comes from selling smart security hardware—such as cameras, video doorbells, security systems, and accessories—through retail, e-commerc...
Arlo Technologies Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The earnings call conveyed strong operational momentum and multiple record achievements: double-digit top-line growth, robust subscription additions, higher ARPU/LTV, significant adjusted EBITDA expansion, raised full-year guidance, and a clear product and services roadmap (Secure 7 and Secure 8). Material positives include strong cash generation, active share repurchases, successful early M&A integration (Aloe Care) and partnership progress (ADT, Comcast). Offsetting these positives are near-term margin pressure on product sales (pro forma product gross margin ~-11.6%), intentional negative product margins as a CAC strategy, an inventory build with lower turns, and reliance on tariff refunds for a portion of near-term profit boosts. Overall, the company appears to be trading some near-term product margin for longer-term subscription and ARR growth with an optimistic roadmap and raised guidance.Positive Updates
Record Revenue and Top-Line Growth
Total revenue of $155.9M (rounded to $156M) set a company record and grew ~20-21% year-over-year; service revenue reached a record $93M, up 19% YoY and comprised ~60% of total revenue.
Negative Updates
Negative Product Gross Margins (Pro Forma)
On a pro forma basis (adjusting out the $8M tariff refund), product gross margin would have been negative ~11.6% in Q2; management expects product gross margins to revert to mid- to high-single-digit negative (potentially into the teens) for the near term.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Revenue and Top-Line Growth
Total revenue of $155.9M (rounded to $156M) set a company record and grew ~20-21% year-over-year; service revenue reached a record $93M, up 19% YoY and comprised ~60% of total revenue.
Read all positive updates
Company Guidance
Arlo guided third‑quarter revenue of $140–$150 million and non‑GAAP net income per diluted share of $0.17–$0.23, and raised full‑year 2026 guidance to $580–$600 million of total revenue with non‑GAAP EPS of $0.90–$1.00; management said it will leverage a partial Q3 tariff refund (roughly $6 million, ≈$0.05 EPS) after receiving an $8 million Q2 refund (≈$0.07 EPS) to invest in partnerships, retail promotions and product/platform innovation, expects subscriptions and services momentum to continue (ARR was $365 million, up 16% YoY) and reiterated focus on household growth after adding ~298,000 paid accounts in Q2 to reach 6.3 million paid accounts, while noting product gross margins will likely revert to negative mid‑to‑high single digits (potentially into the teens) as product promotions act as customer acquisition.Arlo Technologies Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
85
Very Positive
Cash Flow
88
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 587.14M | 529.30M | 510.89M | 491.18M | 490.41M | 435.14M |
| Gross Profit | 269.92M | 232.84M | 187.50M | 167.56M | 136.03M | 108.03M |
| EBITDA | 39.23M | 19.60M | -26.21M | -16.20M | -50.88M | -45.05M |
| Net Income | 30.54M | 14.93M | -30.50M | -22.04M | -56.63M | -56.03M |
Balance Sheet | ||||||
| Total Assets | 374.58M | 310.55M | 298.40M | 285.54M | 272.20M | 347.49M |
| Cash, Cash Equivalents and Short-Term Investments | 141.13M | 166.43M | 151.45M | 136.50M | 113.72M | 175.75M |
| Total Debt | 5.72M | 6.74M | 18.36M | 17.02M | 23.47M | 26.08M |
| Total Liabilities | 216.06M | 182.71M | 197.49M | 182.26M | 184.51M | 234.84M |
| Stockholders Equity | 158.53M | 127.84M | 100.91M | 103.28M | 87.69M | 112.65M |
Cash Flow | ||||||
| Free Cash Flow | 66.87M | 66.90M | 48.62M | 35.45M | -47.97M | -25.46M |
| Operating Cash Flow | 78.25M | 78.72M | 51.31M | 38.30M | -45.96M | -23.20M |
| Investing Cash Flow | 10.33M | 27.75M | 10.84M | -50.69M | -31.77M | 17.73M |
| Financing Cash Flow | -56.52M | -42.07M | -40.77M | -15.14M | -13.94M | -4.97M |
Arlo Technologies Technical Analysis
Negative
13.32
Price Trends
13.57
Negative
13.61
Negative
13.63
Negative
Market Momentum
-0.22
Positive
40.90
Neutral
18.09
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 13.32 is below the 20-day moving average (MA) of 14.18, below the 50-day MA of 13.57, and below the 200-day MA of 13.63, indicating a bearish trend. The MACD of -0.22 indicates Positive momentum. The RSI at 40.90 is Neutral, neither overbought nor oversold. The STOCH value of 18.09 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 116 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $1.43B | 45.32 | 21.25% | ― | 15.65% | ― | |
76 Outperform | $1.30B | 29.53 | 23.59% | 1.62% | 11.39% | 0.75% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
59 Neutral | $40.60M | 66.54 | 1.16% | ― | ― | ― | |
57 Neutral | $956.35M | -200.00 | -4.53% | ― | 41.67% | 94.89% | |
47 Neutral | $71.47M | -1.61 | -23.56% | ― | -8.74% | -46.12% | |
46 Neutral | $33.07M | -0.40 | -152.20% | ― | 88.02% | 63.33% |
* Industrials Sector Average
ARLO
Arlo Technologies
13.06
-4.79
-26.83%
SNT
Senstar Technologies
1.73
-2.85
-62.23%
NSSC
Napco Security Technologies
35.73
-2.06
-5.44%
EVLV
Evolv Technologies Holdings
5.20
-3.16
-37.80%
BAER
Bridger Aerospace Group Holdings
1.16
-0.87
-42.86%
KSCP
Knightscope Inc Class A
1.38
-4.54
-76.69%
Arlo Technologies Corporate Events
Executive/Board ChangesShareholder Meetings
Arlo Shareholders Back Directors, Auditor and Executive Pay
Positive
Jun 23, 2026
On June 18, 2026, Arlo Technologies held its 2026 Annual Meeting of Stockholders, where shareholders elected three Class II directors — Grady K. Summers, Prashant (Sean) Aggarwal and Amy Rothstein — to serve until the 2029 annual meeti...
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.