Alarm (3RL) AI Stock Analysis

Alarm

(Frankfurt:3RL)

Rating:―N/A

Action:N/A

Date:―

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Positive Factors

Recurring revenue durabilityRetention in the mid-95% range supports predictable recurring revenue and indicates strong customer stickiness across Alarm.com’s platform. Durable retention can improve lifetime value, reduce replacement costs, and provide a stable base for expanding video, commercial, automation, and other services.

Negative Factors

Uneven recent growth and marginsAlthough the latest outlook is constructive, slower growth in recent years and variable operating margins indicate that expansion has not been consistently smooth. This could make future earnings progression more dependent on successful new initiatives, disciplined spending, and continued demand for higher-value services.

Alarm (3RL) vs. iShares MSCI Germany ETF (EWG)

Market Cap: EUR 3.18B
Dividend Yield: ―
Average Volume (3M): 167
Price to Earnings (P/E): 27.3
Beta (1Y): 0.75
Revenue Growth: 1.39%
EPS Growth: -15.20%
Country: Germany
Employees: 2,051
Sector: Technology
Sector Strength: 61
Industry: Software - Application

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 into...

Alarm Earnings Call Summary

Earnings Call Date:Aug 05, 2026(Q2-2026)|% Change Since:21.53%|Next Earnings Date:Nov 04, 2026

Earnings Call SentimentPositive

The call highlighted broad-based execution: double-digit SaaS growth (~11% YoY), strong adjusted EBITDA growth (15.7%) and margin expansion (+115 bps), raised full-year guidance, international scale (1M subscribers) and notable EnergyHub operational impact. Lowlights were limited and specific: GAAP net income declined due to lower interest income after debt retirement, free cash flow was modest this quarter due to working capital timing, and new product adoption (commercial fire communicator) and international partner churn present execution risks. Overall, the positive financial performance, raised guidance, and product / market milestones materially outweigh the contained negatives.

Positive Updates

SaaS and License Revenue Growth

SaaS and license revenue of $188.8M in Q2, up ~11% year-over-year (CFO reported 11.1% YoY), exceeding the midpoint of guidance by ~$3.2M.

Negative Updates

GAAP Net Income Decline

GAAP net income attributable to common stockholders was ~$24.2M ($0.48 diluted) in Q2, down from ~$34.6M a year ago; primary driver cited was lower interest income following the January retirement of $500M of convertible notes.

Company Guidance

The company raised its 2026 outlook: Q3 SaaS & license revenue is guided to $189.8–190.0M (≈8.3% growth at the midpoint) and full‑year SaaS & license revenue to $754.0–754.4M (≈9.4% growth at the midpoint, up ≈$4.2M vs. May), total revenue to $1.079–1.089B (including hardware & other of $325–335M, up ≈$15M at the midpoint), and non‑GAAP adjusted EBITDA to $221–223M (up ≈$6.5M at the midpoint) on a path to a ~21% adjusted EBITDA margin exiting 2027; management also projects non‑GAAP adjusted net income of $156–157M (≈$2.92–2.94 per diluted share on ~56.3M shares), a non‑GAAP tax rate of ≈21%, full‑year stock‑based compensation of $34–35M, and expects ~90% conversion of adjusted EBITDA to free cash flow, while continuing buybacks under a $150M authorization (Q2 repurchases ~570K shares for $25M).

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

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

DE:3RL against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KARO	71Outperform	$2.03B	31.86	32.44%	2.28%	31.78%	16.47%
YOU	68Neutral	$6.22B	30.46	82.40%	1.68%	19.77%	-19.22%
LIF	64Neutral	$3.62B	23.35	27.72%	―	33.96%	410.76%
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SMRT	55Neutral	$258.68M	-13.45	-8.50%	―	-2.78%	72.47%
EVCM	50Neutral	$1.62B	49.35	4.74%	―	-6.77%	―

* Technology Sector Average

Performance Comparison

DE:3RL and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
DE:3RL	Alarm.com Holdings Inc.	58.70	16.30	38.44%
SMRT	Smartrent, Inc.	1.35	-0.01	-0.74%
KARO	Karooooo Ltd.	65.66	22.47	52.02%
EVCM	Evercommerce, Inc.	9.16	-2.26	-19.79%
YOU	Clear Secure, Inc.	45.99	15.67	51.66%
LIF	Life360, Inc.	44.44	-54.88	-55.26%

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.

Alarm AI Stock Analysis