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Alarm.com Holdings, Inc. (ALRM) stock analysis

ALRMNasdaqServices-Prepackaged SoftwareFiscal year ends December 31
Financials through Q3 FY2026, quarter ended Sep 30, 2026Last filing: 10-Q on Nov 5, 2026Score 9/308% below fair value
$66.29+0.43 (+0.65%)

Close on Nov 11, 2026Market cap $3.25BP/E 29.9Yield –

StockData Score

Prices as of Nov 11, 2026How the score works

Value3Growth2Performance1Health3Dividend0

Mixed9 of 30 checks passed

Alarm.com passes 9 of the 30 checks behind our score; 14 could not be run for lack of data and count as not passed. Each dot in the shape is one check — hover it for the numbers.

Valuation
3/6
Growth
2/6
Past performance
1/6
Financial health
3/6
Dividend
0/6

What stands out

  • Trading below fair value

    The share price of $66.29 is below our fair value estimate of $72.39.

  • Return on capital over 10%

    Return on invested capital was 184%, above the 10% that usually covers the cost of capital.

  • EPS growing 10%+ a year

    Diluted EPS grew 32.0% a year over the last three fiscal years.

  • Interest well covered

    Operating income covers interest expense 9.5 times.

What to watch

  • Margin of safety under 20%

    The price is 8.4% below fair value, less than the 20% cushion we look for.

  • Revenue growing under 10% a year

    Revenue grew 6.3% a year over the last three fiscal years, short of the 10% we look for.

  • P/E above the industry

    Alarm.com's P/E of 29.9 is above the Computer Programming, Data Processing, and Other Computer Related Services median of 27.6.

  • Guidance lowered

    Alarm.com lowered its full year of 2026 hardware and other revenue outlook on Aug 6, 2026.

Valuation3/6

  • P/E below its 5-year median

    Alarm.com's P/E of 29.9 is below its own 5-year median of 41.1.

  • P/E above the industry

    Alarm.com's P/E of 29.9 is above the Computer Programming, Data Processing, and Other Computer Related Services median of 27.6.

  • EV/EBITDA below its 5-year median

    Alarm.com's EV/EBITDA of 15.3 is below its 5-year median of 22.4.

  • P/B above the industry

    Alarm.com's price-to-book of 3.64 is above the Computer Programming, Data Processing, and Other Computer Related Services median of 3.32.

  • Trading below fair value

    The share price of $66.29 is below our fair value estimate of $72.39.

  • Margin of safety under 20%

    The price is 8.4% below fair value, less than the 20% cushion we look for.

Growth2/6

  • Revenue growing under 10% a year

    Revenue grew 6.3% a year over the last three fiscal years, short of the 10% we look for.

  • EPS growing 10%+ a year

    Diluted EPS grew 32.0% a year over the last three fiscal years.

  • Earnings acceleration

    Needs positive net income now, a year ago and five years ago.

  • Growing slower than the industry

    Revenue grew 9.3% over the last twelve months; the Computer Programming, Data Processing, and Other Computer Related Services median is 9.6%.

  • Guidance lowered

    Alarm.com lowered its full year of 2026 hardware and other revenue outlook on Aug 6, 2026.

  • Gross margin improving

    Gross margin was 66.1% over the last twelve months, against 66.0% a year earlier.

Past performance1/6

  • Return on equity

    Needs positive equity and five years of results.

  • Return on capital over 10%

    Return on invested capital was 184%, above the 10% that usually covers the cost of capital.

  • Return on equity against the industry

    Needs positive equity.

  • Earnings over 5 years

    Needs positive net income five years ago and in the latest year.

  • Net margin against its history

    Needs five years of revenue and net income.

  • Net margin against the industry

    Needs revenue and net income.

Financial health3/6

  • Debt level

    Needs debt and equity figures.

  • Debt trend

    Needs a balance sheet from five years ago with positive equity.

  • Debt coverage

    Needs operating cash flow.

  • Interest well covered

    Operating income covers interest expense 9.5 times.

  • Short-term assets cover short-term debts

    Current assets are 4.83 times current liabilities.

  • Low bankruptcy risk

    The Altman Z-score is 4.45; above 3 is the safe zone and below 1.8 the distress zone.

Dividend0/6

  • No dividend

    Alarm.com has not paid a dividend in the last twelve months.

  • Yield against Treasuries

    No dividend.

  • Yield against the market

    No dividend.

  • Dividend stability

    No dividend.

  • Earnings cover

    No dividend.

  • Cash-flow cover

    No dividend.

Scores of similar companies

Fair value

How we estimate it

Our estimate per share

$72.39

The share price is 8% below this estimate.

20%+ below
Near fair value
20%+ above
$66.29Price
MethodMultiple usedOwn 5Y medianIndustry medianValue per shareWeight
P/E34.4×41.1×27.6×$76.3340%
EV/EBITDA20.6×22.4×18.8×$85.5535%
P/B3.8×4.2×3.3×$68.7710%
Earnings power9.3% cost of equity––$33.6315%
Fair value$72.39100%

Valuation over time

Using the earnings and balance sheet published at each date, not today's.

  • P/E at month end
  • Own 5-year median 41.1
  • Computer Programming, Data Processing, and Other Computer Related Services median 27.6

An estimate from reported numbers and market multiples, not a price target or investment advice. It can be far off for companies whose profits are about to change sharply.

Market risk

From the past year of daily prices.

Liquidity

Low risk

Average value traded per day
$31.20M
Value traded per 1% price move
$24.80M

Downside

Low risk

Typical loss in a bad month
11.6%
Volatility (annualized)
30%
Sharpe ratio, 1 year
0.90
Beta to the S&P 500 (5Y)
0.89

Typical bad-month loss, week by week

25%: high

Margins

Share of revenue, fiscal years 2012 to 2025

Gross margin

66.1%+2.9 pts over 5 years

Operating margin

13.2%+4.1 pts over 5 years

Net margin

–

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