Overall ALRM gets a fundamental rating of 5 out of 10. We evaluated ALRM against 277 industry peers in the Software industry. While ALRM belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. ALRM is not valued too expensively and it also shows a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

ALRM had positive earnings in the past year.
ALRM had a positive operating cash flow in the past year.
ALRM had positive earnings in each of the past 5 years.
In the past 5 years ALRM always reported a positive cash flow from operatings.

1.2 Ratios

With a decent Return On Assets value of 6.04%, ALRM is doing good in the industry, outperforming 74.37% of the companies in the same industry.
The Return On Equity of ALRM (15.49%) is better than 83.03% of its industry peers.
ALRM has a Return On Invested Capital of 7.43%. This is in the better half of the industry: ALRM outperforms 76.90% of its industry peers.
ALRM had an Average Return On Invested Capital over the past 3 years of 4.36%. This is significantly below the industry average of 10.78%.
The last Return On Invested Capital (7.43%) for ALRM is above the 3 year average (4.36%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	6.04%
ROE	15.49%
ROIC	7.43%

ROA(3y)5.32%

ROA(5y)6.17%

ROE(3y)12.75%

ROE(5y)12.69%

ROIC(3y)4.36%

ROIC(5y)5.04%

1.3 Margins

ALRM has a better Profit Margin (12.92%) than 73.65% of its industry peers.
In the last couple of years the Profit Margin of ALRM has grown nicely.
The Operating Margin of ALRM (13.06%) is better than 78.70% of its industry peers.
ALRM's Operating Margin has improved in the last couple of years.
ALRM has a Gross Margin of 66.03%. This is comparable to the rest of the industry: ALRM outperforms 45.13% of its industry peers.
ALRM's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	13.06%
PM (TTM)	12.92%
GM	66.03%

OM growth 3Y11.98%

OM growth 5Y2.86%

PM growth 3Y23.67%

PM growth 5Y4.4%

GM growth 3Y3.35%

GM growth 5Y0.57%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ALRM is destroying value.
Compared to 1 year ago, ALRM has less shares outstanding
ALRM has more shares outstanding than it did 5 years ago.
The debt/assets ratio for ALRM is higher compared to a year ago.

2.2 Solvency

An Altman-Z score of 2.55 indicates that ALRM is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of ALRM (2.55) is comparable to the rest of the industry.
ALRM has a debt to FCF ratio of 6.46. This is a slightly negative value and a sign of low solvency as ALRM would need 6.46 years to pay back of all of its debts.
ALRM has a Debt to FCF ratio of 6.46. This is comparable to the rest of the industry: ALRM outperforms 53.79% of its industry peers.
A Debt/Equity ratio of 0.59 indicates that ALRM is somewhat dependend on debt financing.
ALRM has a Debt to Equity ratio of 0.59. This is in the lower half of the industry: ALRM underperforms 67.87% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.59
Debt/FCF	6.46
Altman-Z	2.55

ROIC/WACC0.74

WACC10.01%

2.3 Liquidity

A Current Ratio of 2.06 indicates that ALRM has no problem at all paying its short term obligations.
ALRM has a Current ratio (2.06) which is comparable to the rest of the industry.
ALRM has a Quick Ratio of 1.92. This is a normal value and indicates that ALRM is financially healthy and should not expect problems in meeting its short term obligations.
ALRM has a Quick ratio (1.92) which is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Current Ratio	2.06
Quick Ratio	1.92

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

ALRM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.90%.
The Earnings Per Share has been growing by 8.16% on average over the past years. This is quite good.
Looking at the last year, ALRM shows a small growth in Revenue. The Revenue has grown by 7.35% in the last year.
Measured over the past years, ALRM shows a quite strong growth in Revenue. The Revenue has been growing by 13.34% on average per year.

EPS 1Y (TTM)6.9%

EPS 3Y4.46%

EPS 5Y8.16%

EPS Q2Q%22.58%

Revenue 1Y (TTM)7.35%

Revenue growth 3Y7.86%

Revenue growth 5Y13.34%

Sales Q2Q%6.61%

3.2 Future

Based on estimates for the next years, ALRM will show a small growth in Earnings Per Share. The EPS will grow by 7.93% on average per year.
ALRM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.96% yearly.

EPS Next Y13.16%

EPS Next 2Y9.75%

EPS Next 3Y7.93%

EPS Next 5YN/A

Revenue Next Year6.95%

Revenue Next 2Y5.52%

Revenue Next 3Y5%

Revenue Next 5Y3.96%

3.3 Evolution

The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

ALRM is valuated rather expensively with a Price/Earnings ratio of 19.73.
ALRM's Price/Earnings ratio is a bit cheaper when compared to the industry. ALRM is cheaper than 74.37% of the companies in the same industry.
ALRM is valuated rather cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
ALRM is valuated rather expensively with a Price/Forward Earnings ratio of 17.82.
74.73% of the companies in the same industry are more expensive than ALRM, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 24.26. ALRM is valued slightly cheaper when compared to this.

		Industry Rank	Sector Rank
PE	19.73
Fwd PE	17.82

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ALRM indicates a rather cheap valuation: ALRM is cheaper than 83.03% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, ALRM is valued cheaply inside the industry as 82.31% of the companies are valued more expensively.

		Industry Rank	Sector Rank
P/FCF	15.95
EV/EBITDA	15.28

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ALRM has a very decent profitability rating, which may justify a higher PE ratio.