ALARM.COM HOLDINGS INC (ALRM) Stock Fundamental Analysis
NASDAQ:ALRM - Nasdaq - US0116421050 - Common Stock - Currency: USD
ALRM gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 283 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 has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year ALRM was profitable.
In the past year ALRM had a positive cash flow from operations.
ALRM had positive earnings in each of the past 5 years.
ALRM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ALRM's Return On Assets of 6.18% is fine compared to the rest of the industry. ALRM outperforms 77.74% of its industry peers.
ALRM has a Return On Equity of 16.91%. This is amongst the best in the industry. ALRM outperforms 82.69% of its industry peers.
The Return On Invested Capital of ALRM (7.19%) is better than 79.15% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ALRM is significantly below the industry average of 12.21%.
The last Return On Invested Capital (7.19%) for ALRM is above the 3 year average (4.36%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.18% | ||
| ROE | 16.91% | ||
| ROIC | 7.19% |
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
With a decent Profit Margin value of 13.45%, ALRM is doing good in the industry, outperforming 79.15% of the companies in the same industry.
ALRM's Profit Margin has improved in the last couple of years.
ALRM has a better Operating Margin (12.51%) than 79.51% of its industry peers.
ALRM's Operating Margin has improved in the last couple of years.
ALRM has a Gross Margin of 65.68%. This is comparable to the rest of the industry: ALRM outperforms 47.35% of its industry peers.
In the last couple of years the Gross Margin of ALRM has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.51% | ||
| PM (TTM) | 13.45% | ||
| GM | 65.68% |
OM growth 3Y11.98%
OM growth 5Y2.86%
PM growth 3Y23.67%
PM growth 5Y4.4%
GM growth 3Y3.35%
GM growth 5Y0.57%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ALRM is destroying value.
The number of shares outstanding for ALRM has been reduced compared to 1 year ago.
Compared to 5 years ago, ALRM has more shares outstanding
The debt/assets ratio for ALRM is higher compared to a year ago.
2.2 Solvency
ALRM has an Altman-Z score of 2.71. This is not the best score and indicates that ALRM is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.71, ALRM perfoms like the industry average, outperforming 56.89% of the companies in the same industry.
ALRM has a debt to FCF ratio of 5.99. This is a neutral value as ALRM would need 5.99 years to pay back of all of its debts.
ALRM has a Debt to FCF ratio (5.99) which is comparable to the rest of the industry.
A Debt/Equity ratio of 0.64 indicates that ALRM is somewhat dependend on debt financing.
ALRM has a worse Debt to Equity ratio (0.64) than 68.55% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 5.99 | ||
| Altman-Z | 2.71 |
ROIC/WACC0.72
WACC9.96%
2.3 Liquidity
A Current Ratio of 2.14 indicates that ALRM has no problem at all paying its short term obligations.
With a decent Current ratio value of 2.14, ALRM is doing good in the industry, outperforming 64.31% of the companies in the same industry.
ALRM has a Quick Ratio of 2.01. This indicates that ALRM is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of ALRM (2.01) is better than 61.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.14 | ||
| Quick Ratio | 2.01 |
3. Growth
3.1 Past
ALRM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.91%.
The Earnings Per Share has been growing by 8.16% on average over the past years. This is quite good.
The Revenue has been growing slightly by 6.71% in the past year.
ALRM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 13.34% yearly.
EPS 1Y (TTM)6.91%
EPS 3Y4.46%
EPS 5Y8.16%
EPS Q2Q%8%
Revenue 1Y (TTM)6.71%
Revenue growth 3Y7.86%
Revenue growth 5Y13.34%
Sales Q2Q%6.96%
3.2 Future
The Earnings Per Share is expected to grow by 3.17% on average over the next years.
The Revenue is expected to grow by 3.96% on average over the next years.
EPS Next Y2.31%
EPS Next 2Y4.54%
EPS Next 3Y3.17%
EPS Next 5YN/A
Revenue Next Year5.37%
Revenue Next 2Y4.78%
Revenue Next 3Y4.9%
Revenue Next 5Y3.96%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 25.07, ALRM can be considered very expensive at the moment.
ALRM's Price/Earnings ratio is a bit cheaper when compared to the industry. ALRM is cheaper than 72.79% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.60, ALRM is valued at the same level.
A Price/Forward Earnings ratio of 23.35 indicates a rather expensive valuation of ALRM.
Based on the Price/Forward Earnings ratio, ALRM is valued a bit cheaper than 71.02% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.43. ALRM is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.07 | ||
| Fwd PE | 23.35 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ALRM is valued cheaper than 83.04% of the companies in the same industry.
ALRM's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ALRM is cheaper than 84.81% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.6 | ||
| EV/EBITDA | 18.25 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ALRM does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of ALRM may justify a higher PE ratio.
PEG (NY)10.84
PEG (5Y)3.07
EPS Next 2Y4.54%
EPS Next 3Y3.17%
5. Dividend
5.1 Amount
ALRM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:ALRM (5/21/2025, 12:51:22 PM)
58.17
-0.59 (-1%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners97.72%
Inst Owner Change0.71%
Ins Owners2.65%
Ins Owner Change-0.02%
Market Cap2.89B
Analysts78.67
Price Target66.13 (13.68%)
Short Float %3.9%
Short Ratio4.65
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.22%
Min EPS beat(2)6.37%
Max EPS beat(2)12.06%
EPS beat(4)4
Avg EPS beat(4)14.59%
Min EPS beat(4)6.37%
Max EPS beat(4)24.25%
EPS beat(8)8
Avg EPS beat(8)19.81%
EPS beat(12)12
Avg EPS beat(12)19.63%
EPS beat(16)16
Avg EPS beat(16)22.2%
Revenue beat(2)1
Avg Revenue beat(2)0.01%
Min Revenue beat(2)-0.02%
Max Revenue beat(2)0.03%
Revenue beat(4)3
Avg Revenue beat(4)0.69%
Min Revenue beat(4)-0.02%
Max Revenue beat(4)1.88%
Revenue beat(8)4
Avg Revenue beat(8)0.07%
Revenue beat(12)6
Avg Revenue beat(12)-0.14%
Revenue beat(16)10
Avg Revenue beat(16)2.13%
PT rev (1m)-6.94%
PT rev (3m)-11.94%
EPS NQ rev (1m)-3.63%
EPS NQ rev (3m)-7.17%
EPS NY rev (1m)0.73%
EPS NY rev (3m)0.59%
Revenue NQ rev (1m)0.13%
Revenue NQ rev (3m)0.11%
Revenue NY rev (1m)0.59%
Revenue NY rev (3m)0.76%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.07 | ||
| Fwd PE | 23.35 | ||
| P/S | 3.03 | ||
| P/FCF | 17.6 | ||
| P/OCF | 16.01 | ||
| P/B | 3.81 | ||
| P/tB | 5.66 | ||
| EV/EBITDA | 18.25 |
EPS(TTM)2.32
EY3.99%
EPS(NY)2.49
Fwd EY4.28%
FCF(TTM)3.31
FCFY5.68%
OCF(TTM)3.63
OCFY6.24%
SpS19.21
BVpS15.28
TBVpS10.28
PEG (NY)10.84
PEG (5Y)3.07
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.18% | ||
| ROE | 16.91% | ||
| ROCE | 8.53% | ||
| ROIC | 7.19% | ||
| ROICexc | 47.08% | ||
| ROICexgc | N/A | ||
| OM | 12.51% | ||
| PM (TTM) | 13.45% | ||
| GM | 65.68% | ||
| FCFM | 17.2% |
ROA(3y)5.32%
ROA(5y)6.17%
ROE(3y)12.75%
ROE(5y)12.69%
ROIC(3y)4.36%
ROIC(5y)5.04%
ROICexc(3y)10.8%
ROICexc(5y)11.57%
ROICexgc(3y)17.63%
ROICexgc(5y)21.62%
ROCE(3y)5.18%
ROCE(5y)5.98%
ROICexcg growth 3Y-6.99%
ROICexcg growth 5Y-4.21%
ROICexc growth 3Y3.2%
ROICexc growth 5Y4.42%
OM growth 3Y11.98%
OM growth 5Y2.86%
PM growth 3Y23.67%
PM growth 5Y4.4%
GM growth 3Y3.35%
GM growth 5Y0.57%
F-Score7
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 5.99 | ||
| Debt/EBITDA | 3.27 | ||
| Cap/Depr | 54.88% | ||
| Cap/Sales | 1.7% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 121.14% | ||
| Profit Quality | 127.94% | ||
| Current Ratio | 2.14 | ||
| Quick Ratio | 2.01 | ||
| Altman-Z | 2.71 |
F-Score7
WACC9.96%
ROIC/WACC0.72
Cap/Depr(3y)58.68%
Cap/Depr(5y)59.61%
Cap/Sales(3y)2.14%
Cap/Sales(5y)2.36%
Profit Quality(3y)118.74%
Profit Quality(5y)125.77%
High Growth Momentum
Growth
EPS 1Y (TTM)6.91%
EPS 3Y4.46%
EPS 5Y8.16%
EPS Q2Q%8%
EPS Next Y2.31%
EPS Next 2Y4.54%
EPS Next 3Y3.17%
EPS Next 5YN/A
Revenue 1Y (TTM)6.71%
Revenue growth 3Y7.86%
Revenue growth 5Y13.34%
Sales Q2Q%6.96%
Revenue Next Year5.37%
Revenue Next 2Y4.78%
Revenue Next 3Y4.9%
Revenue Next 5Y3.96%
EBIT growth 1Y55.55%
EBIT growth 3Y20.79%
EBIT growth 5Y16.58%
EBIT Next Year16.05%
EBIT Next 3Y11.76%
EBIT Next 5Y13.18%
FCF growth 1Y330.26%
FCF growth 3Y30.07%
FCF growth 5Y48.34%
OCF growth 1Y167.98%
OCF growth 3Y25.99%
OCF growth 5Y34.38%