Alarm.com Holdings, Inc. (ALRM) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Alarm.com Holdings, Inc. (ALRM) Technology Profile & Competitive Position

Alarm.com Holdings, Inc. is a prominent technology company delivering cloud-based security and automation solutions for residential and commercial properties, leveraging advanced IoT technologies to enhance safety and energy management in smart environments.

What Is the Investment Thesis for ALRM?

Alarm.com Holdings, Inc. presents a solid investment thesis characterized by a market capitalization of $2.73B and a P/E ratio of 23.18, indicating a favorable valuation relative to its growth potential. The company has demonstrated a profit margin of 12.4% and a gross margin of 63.4%, reflecting operational efficiency and strong demand for its cloud-based solutions. Key growth catalysts include the increasing adoption of smart home technologies and the expansion of its service offerings, which are expected to drive revenue growth in the coming years. Alarm.com's focus on enhancing user experience through innovative security and automation solutions positions it well to capture market share in the expanding IoT sector. However, potential risks include competitive pressures from emerging players and technological disruptions that could impact its market position. Overall, Alarm.com is well-positioned to leverage its strengths and capitalize on industry trends, making it an attractive candidate for further analysis.

Based on FMP financials and quantitative analysis

ALRM Key Highlights

Market capitalization of $2.73B indicates significant market presence and investor interest.

• P/E ratio of 23.18 suggests potential for growth relative to earnings.
• Profit margin of 12.4% reflects strong operational efficiency in the competitive technology sector.
• Gross margin of 63.4% exceeds industry averages, highlighting effective cost management and pricing strategies.
• A dedicated workforce of 2,020 employees supports robust operational capabilities and innovation.

Who Are ALRM's Competitors?

ALRM is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are ALRM's Key Strengths?

Leading position in the cloud-based security and automation market.

• Robust product portfolio with a wide range of connected devices.
• Strong financial performance with healthy profit and gross margins.
• Established partnerships with service providers enhance distribution capabilities.

What Are ALRM's Weaknesses?

Dependence on the U.S. market for a significant portion of revenue.

• Limited brand awareness in international markets compared to domestic presence.
• Absence of dividend payments may deter income-focused investors.
• Potential vulnerability to technological disruptions from emerging competitors.

What Could Drive ALRM Stock Higher?

Expansion into international markets to enhance revenue diversification.

• Continuous product innovation to meet evolving customer demands.
• Strong partnerships with service providers to increase market penetration.
• Launch of new energy management solutions to capitalize on sustainability trends.

What Are the Key Risks for ALRM?

Insider selling — insiders were net sellers of roughly $6.3M recently.

• Vulnerability to competitive pressures from emerging technology firms.
• Dependence on the U.S. market may limit growth opportunities.
• Regulatory changes regarding data privacy could impact service offerings.
• Economic fluctuations may affect consumer spending on technology.

What Are the Growth Opportunities for ALRM?

• Alarm.com is well-positioned to capitalize on this trend through its innovative product offerings, which include integrated security systems and energy management solutions. By enhancing its marketing efforts and expanding partnerships with service providers, Alarm.com can capture a larger share of this growing market.
• Growth opportunity 2: The commercial automation sector is also expanding, with businesses increasingly adopting smart technologies to enhance security and operational efficiency. Alarm.com's commercial solutions, which include multi-site management and energy savings programs, are tailored to meet the needs of this market. The company can leverage its existing technology to penetrate this segment further, targeting businesses looking to improve safety and reduce operational costs.
• Growth opportunity 3: The rise of the Internet of Things (IoT) presents significant opportunities for Alarm.com to expand its product offerings. By integrating more IoT devices and enhancing interoperability among its products, the company can attract new customers and increase the value proposition for existing users. This strategy could lead to increased subscription revenues and a stronger competitive position in the market.
• Growth opportunity 4: Alarm.com can explore international expansion to tap into emerging markets where demand for smart home and security solutions is on the rise. By entering new geographical markets, the company can diversify its revenue streams and reduce dependence on the U.S. market. This expansion could be facilitated through partnerships with local service providers, enhancing market penetration and brand recognition.
• Growth opportunity 5: The increasing focus on energy efficiency and sustainability offers Alarm.com an opportunity to enhance its energy management solutions. By developing advanced analytics and reporting tools for energy usage, the company can appeal to environmentally conscious consumers and businesses. This aligns with global trends toward sustainability and could drive additional revenue through innovative service offerings.

What Threats Does ALRM Face?

• Intense competition from established players and new entrants in the technology sector.
• Rapid technological changes could render existing products obsolete.
• Economic downturns may affect consumer spending on non-essential technology.
• Regulatory changes related to data privacy and security could impact operations.

What Are ALRM's Competitive Advantages?

• Strong brand recognition and reputation in the smart home and security market.
• Comprehensive product ecosystem that integrates various security and automation solutions.
• Established relationships with service providers and partners enhance market reach and distribution.
• Innovative technology and continuous product development keep the company competitive.

What Does ALRM Do?

Founded in 2000 and headquartered in Tysons, Virginia, Alarm.com Holdings, Inc. has emerged as a leader in the technology sector, providing cloud-based solutions tailored for smart residential and commercial properties. The company operates through two primary segments: Alarm.com and Other, offering a wide array of interactive security solutions that empower users to monitor and control their security systems. Its product portfolio includes connected devices such as door locks, motion sensors, video cameras, and IoT devices, which collectively enhance the safety and convenience of properties. Alarm.com also specializes in video monitoring solutions, incorporating features like video analytics, live streaming, and continuous high-definition recording. The company’s intelligent automation and energy management solutions further distinguish it in the marketplace, offering users tools for energy usage monitoring, HVAC management, and whole-home water safety. Alarm.com serves a diverse clientele, including both residential and commercial subscribers, and has built a robust ecosystem of service provider solutions that facilitate account management and support for its partners. With a dedicated workforce of 2,020 employees, Alarm.com continues to innovate and expand its offerings, positioning itself as a key player in the rapidly evolving smart home and commercial automation landscape.

What Products and Services Does ALRM Offer?

• Provide cloud-based interactive security solutions for residential and commercial properties.
• Offer connected security devices, including door locks, motion sensors, and video cameras.
• Deliver video monitoring solutions with features like live streaming and video analytics.
• Develop intelligent automation and energy management solutions for enhanced user experience.
• Serve both residential and commercial subscribers with tailored security and automation services.
• Facilitate service provider solutions, including account management and training tools.

How Does ALRM Make Money?

• Generate revenue primarily through subscription fees for security and automation services.
• Offer a range of connected devices that complement subscription services, enhancing customer value.
• Provide service provider solutions that support partners in managing customer accounts and sales.
• Leverage partnerships with home builders and security companies to expand distribution channels.

What Industry Does ALRM Operate In?

The software application industry, particularly in the realm of smart home and commercial automation, is experiencing rapid growth driven by increasing consumer demand for security and energy management solutions. Alarm.com Holdings, Inc. is strategically positioned within this expanding market, competing against notable players such as Clear Secure, Inc., NCR Atleos Corporation, and Rumble Inc. The company's focus on cloud-based solutions and IoT integration allows it to differentiate itself in a crowded landscape, catering to both residential and commercial sectors seeking advanced security and automation capabilities.

Who Are ALRM's Key Customers?

• Residential homeowners seeking enhanced security and automation solutions.
• Commercial businesses looking for efficient security and energy management systems.
• Service providers and installers who partner with Alarm.com to offer integrated solutions.
• Home builders and developers interested in incorporating smart technology into new constructions.

Company Profile

Alarm.com Holdings, Inc. operates in the Software - Application industry within the Technology sector. It is headquartered in Tysons, United States.

Alarm.com Holdings, Inc. Financial Trajectory

Alarm.com Holdings, Inc. (ALRM) reported $277.7M in revenue for Jun 2026, reflecting 4.7% growth compared to the prior quarter. The company recorded net income of $24.2M, with diluted EPS of $0.43. Revenue has increased across the last three reported quarters, suggesting sustained momentum for this mid-cap Technology company. Across the four most recent quarters, ALRM averaged $0.52 in diluted EPS.

How Alarm.com Holdings, Inc. Is Valued

Alarm.com Holdings, Inc. carries a market capitalization of $2.73B, placing it in the mid-cap category. Analyst price targets span from $60.00 to $65.00, with a consensus of $62.50. At the current price of $55.17, that implies approximately 13% upside potential. Relative to its peer group, ALRM's quantitative score of 81/100 is roughly in line with the peer average of 78/100.

Return on equity for Alarm.com Holdings, Inc. stands at 15.4%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 7.8%, showing how much profit it generates from its asset base. ALRM trades at a trailing price-to-earnings ratio of 23.18, below the Technology sector average of ~32.70x. Its free cash flow yield is 7.5%, a gauge of the cash the business throws off relative to its market value. A current ratio of 5.16 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is 5.7%, the inverse of the P/E and a quick read on earnings relative to price.

Alarm.com Holdings, Inc.'s Piotroski F-Score is 7/9, a 9-point checklist of profitability, leverage and efficiency — signaling solid underlying fundamentals. Its Altman Z-Score of 4.13 places it in the safe zone, indicating low near-term bankruptcy risk.

Alarm.com Holdings, Inc. has beaten Wall Street's EPS estimate in 8 of its last 8 reported quarters — a consistent record of delivering on expectations. Reported results have landed about 14.8% above estimates on average.

Wall Street analysts project Alarm.com Holdings, Inc. revenue of about $1.08B for fiscal 2026, with EPS near $2.89. The estimate reflects 4 contributing analysts.

Over the past six months, Alarm.com Holdings, Inc. insiders filed 30 SEC Form 4 transactions — 17 sales and 13 purchases. On net that is roughly 76K shares acquired (about $6.3M) — insiders putting money in tends to read as conviction.

ALRM Financials

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Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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