📊 ALRM Key Takeaways
Is Alarm.com Holdings, Inc. (ALRM) a Good Investment?
Alarm.com demonstrates solid fundamental strength with double-digit profitability margins (13.1% net, 13.2% operating) and robust free cash flow generation of $137M, representing 13.6% of revenue. The company maintains a fortress balance sheet with minimal leverage (0.13x debt/equity), strong liquidity (1.92x current ratio), and substantial cash reserves of $960.6M, providing significant financial flexibility.
Alarm.com shows solid fundamental quality with mid-single-digit revenue growth, double-digit operating and net margins, and strong free cash flow generation. The balance sheet is a major strength, with nearly $961M in cash, low leverage, and healthy liquidity, though the relatively flat net income growth suggests some margin pressure or rising costs that should be monitored.
Why Buy Alarm.com Holdings, Inc. Stock? ALRM Key Strengths
- Strong profitability with 13.1% net margin and 13.2% operating margin demonstrating operational efficiency
- Exceptional free cash flow generation of $137M (13.6% FCF margin) with 89% conversion from operating cash flow, indicating high-quality earnings
- Conservative balance sheet with low leverage (0.13x debt/equity), $960.6M cash position, and 1.92x current ratio providing substantial financial cushion
- Solid returns on equity (15.6%) and assets (6.2%) indicating effective capital deployment
- Revenue growth of 7.6% YoY with diluted EPS growth of 7.4%, showing consistent profitability expansion alongside top-line growth
- Strong balance sheet with high cash reserves and low debt burden
- Consistent profitability with 13.2% operating margin and 13.1% net margin
- Healthy cash generation, including $137.05M of free cash flow and a 13.6% FCF margin
ALRM Stock Risks: Alarm.com Holdings, Inc. Investment Risks
- Modest revenue growth rate of 7.6% YoY suggests mature market dynamics or competitive pressures in software/cloud services sector
- Net income growth of only 0.7% YoY despite 7.6% revenue growth indicates margin compression or operational headwinds
- Zero insider activity (Form 4 filings) in last 90 days may suggest limited management confidence, though could be timing-related
- Missing gross margin data and interest coverage metrics limit full visibility into cost structure and debt service capability
- Software-as-a-service (SIC 7372) sector faces intensifying competition and potential customer acquisition cost pressures
- Net income growth of just 0.7% lagged revenue growth, indicating possible cost pressure
- Revenue growth of 7.6% is solid but not high, leaving less room for execution missteps
- Gross margin and interest coverage are unavailable, limiting visibility into cost structure and fixed-charge resilience
Key Metrics to Watch
- Revenue growth trajectory and year-over-year comparison for evidence of acceleration or deceleration
- Net margin expansion or contraction relative to operating margin to assess cost discipline
- Free cash flow consistency and conversion rate to ensure sustainable capital generation
- Debt/equity ratio stability to confirm maintenance of conservative leverage
- Customer retention and net revenue retention rates as indicators of competitive moat strength
- Operating and net margin trend
- Free cash flow growth relative to revenue growth
Alarm.com Holdings, Inc. (ALRM) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Alarm.com Holdings, Inc. presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
ALRM Profit Margin, ROE & Profitability Analysis
ALRM vs Technology Sector: How Alarm.com Holdings, Inc. Compares
How Alarm.com Holdings, Inc. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Alarm.com Holdings, Inc. Stock Overvalued? ALRM Valuation Analysis 2026
Based on fundamental analysis, Alarm.com Holdings, Inc. has mixed fundamental signals relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Alarm.com Holdings, Inc. Balance Sheet: ALRM Debt, Cash & Liquidity
ALRM Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Alarm.com Holdings, Inc.'s revenue has grown significantly by 35% over the 5-year period, indicating strong business expansion. The most recent EPS of $1.53 reflects profitable operations.
ALRM Revenue Growth, EPS Growth & YoY Performance
ALRM Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $240.5M | $35.1M | $0.65 |
| Q2 2025 | $233.8M | $32.5M | $0.62 |
| Q1 2025 | $223.3M | $23.4M | $0.44 |
| Q3 2024 | $221.9M | $19.4M | $0.37 |
| Q2 2024 | $223.9M | $15.6M | $0.30 |
| Q1 2024 | $209.7M | $14.2M | $0.28 |
| Q3 2023 | $216.1M | $18.1M | $0.35 |
| Q2 2023 | $212.8M | $10.8M | $0.21 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Alarm.com Holdings, Inc. Dividends, Buybacks & Capital Allocation
ALRM SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Alarm.com Holdings, Inc. (CIK: 0001459200)
📋 Recent SEC Filings
❓ Frequently Asked Questions about ALRM
What is the AI rating for ALRM?
Alarm.com Holdings, Inc. (ALRM) has a Combined AI Rating of BUY from Claude (BUY) and ChatGPT (BUY) with 78% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ALRM's key strengths?
Claude: Strong profitability with 13.1% net margin and 13.2% operating margin demonstrating operational efficiency. Exceptional free cash flow generation of $137M (13.6% FCF margin) with 89% conversion from operating cash flow, indicating high-quality earnings. ChatGPT: Strong balance sheet with high cash reserves and low debt burden. Consistent profitability with 13.2% operating margin and 13.1% net margin.
What are the risks of investing in ALRM?
Claude: Modest revenue growth rate of 7.6% YoY suggests mature market dynamics or competitive pressures in software/cloud services sector. Net income growth of only 0.7% YoY despite 7.6% revenue growth indicates margin compression or operational headwinds. ChatGPT: Net income growth of just 0.7% lagged revenue growth, indicating possible cost pressure. Revenue growth of 7.6% is solid but not high, leaving less room for execution missteps.
What is ALRM's revenue and growth?
Alarm.com Holdings, Inc. reported revenue of $1.0B.
Does ALRM pay dividends?
Alarm.com Holdings, Inc. does not currently pay dividends.
Where can I find ALRM SEC filings?
Official SEC filings for Alarm.com Holdings, Inc. (CIK: 0001459200) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ALRM's EPS?
Alarm.com Holdings, Inc. has a diluted EPS of $2.46.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is ALRM a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Alarm.com Holdings, Inc. has a BUY rating with 78% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is ALRM stock overvalued or undervalued?
Valuation metrics for ALRM: ROE of 15.6% (sector avg: 22%), net margin of 13.1% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
Should I buy ALRM stock in 2026?
Our dual AI analysis gives Alarm.com Holdings, Inc. a combined BUY rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is ALRM's free cash flow?
Alarm.com Holdings, Inc.'s operating cash flow is $153.3M, with capital expenditures of $16.3M. FCF margin is 13.6%.
How does ALRM compare to other Technology stocks?
Vs Technology sector averages: Net margin 13.1% (avg: 18%), ROE 15.6% (avg: 22%), current ratio 1.92 (avg: 2.5).