ALARM.COM HOLDINGS INC (ALRM) Fundamental Analysis & Valuation
NASDAQ:ALRM • US0116421050
46.595 USD
-0.3 (-0.65%)
At close: Mar 13, 2026
46.595 USD
0 (0%)
After Hours: 3/13/2026, 8:09:35 PM
This ALRM fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
We assign a fundamental rating of 5 out of 10 to ALRM. ALRM was compared to 277 industry peers in the Software industry. ALRM scores excellent on profitability, but there are some minor concerns on its financial health. ALRM has a correct valuation and a medium growth rate.
1. ALRM Profitability Analysis
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.
- Each year in the past 5 years ALRM had a positive operating cash flow.
1.2 Ratios
- ALRM has a better Return On Assets (6.20%) than 76.17% of its industry peers.
- With an excellent Return On Equity value of 15.63%, ALRM belongs to the best of the industry, outperforming 82.67% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 7.43%, ALRM is in the better half of the industry, outperforming 78.34% of the companies in the same industry.
- ALRM had an Average Return On Invested Capital over the past 3 years of 5.52%. This is significantly below the industry average of 10.89%.
- The last Return On Invested Capital (7.43%) for ALRM is above the 3 year average (5.52%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.2% | ||
| ROE | 15.63% | ||
| ROIC | 7.43% |
ROA(3y)5.97%
ROA(5y)5.28%
ROE(3y)14.83%
ROE(5y)12.48%
ROIC(3y)5.52%
ROIC(5y)4.95%
1.3 Margins
- ALRM's Profit Margin of 13.11% is fine compared to the rest of the industry. ALRM outperforms 76.90% of its industry peers.
- ALRM's Profit Margin has been stable in the last couple of years.
- The Operating Margin of ALRM (13.22%) is better than 79.78% of its industry peers.
- ALRM's Operating Margin has improved in the last couple of years.
- ALRM has a Gross Margin (66.15%) which is comparable to the rest of the industry.
- 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 | 13.22% | ||
| PM (TTM) | 13.11% | ||
| GM | 66.15% |
OM growth 3Y29.73%
OM growth 5Y7.72%
PM growth 3Y25.19%
PM growth 5Y0.79%
GM growth 3Y3.69%
GM growth 5Y0.92%
2. ALRM Health Analysis
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ALRM is destroying value.
- ALRM has about the same amout of shares outstanding than it did 1 year ago.
- The number of shares outstanding for ALRM has been increased compared to 5 years ago.
- Compared to 1 year ago, ALRM has an improved debt to assets ratio.
2.2 Solvency
- ALRM has an Altman-Z score of 2.45. 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.
- Looking at the Altman-Z score, with a value of 2.45, ALRM is in the better half of the industry, outperforming 61.37% of the companies in the same industry.
- The Debt to FCF ratio of ALRM is 7.29, which is on the high side as it means it would take ALRM, 7.29 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of ALRM (7.29) is comparable to the rest of the industry.
- ALRM has a Debt/Equity ratio of 0.58. This is a neutral value indicating ALRM is somewhat dependend on debt financing.
- ALRM's Debt to Equity ratio of 0.58 is on the low side compared to the rest of the industry. ALRM is outperformed by 67.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 7.29 | ||
| Altman-Z | 2.45 |
ROIC/WACC0.77
WACC9.65%
2.3 Liquidity
- ALRM has a Current 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 Current ratio (1.92) which is comparable to the rest of the industry.
- A Quick Ratio of 1.78 indicates that ALRM should not have too much problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 1.78, ALRM is in line with its industry, outperforming 53.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.92 | ||
| Quick Ratio | 1.78 |
3. ALRM Growth Analysis
3.1 Past
- The Earnings Per Share has grown by an nice 14.91% over the past year.
- Measured over the past years, ALRM shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.16% on average per year.
- Looking at the last year, ALRM shows a small growth in Revenue. The Revenue has grown by 7.59% in the last year.
- The Revenue has been growing by 10.35% on average over the past years. This is quite good.
EPS 1Y (TTM)14.91%
EPS 3Y10.16%
EPS 5Y8.16%
EPS Q2Q%24.14%
Revenue 1Y (TTM)7.59%
Revenue growth 3Y6.27%
Revenue growth 5Y10.35%
Sales Q2Q%8.02%
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 6.70% on average per year.
- ALRM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.92% yearly.
EPS Next Y8.57%
EPS Next 2Y8.63%
EPS Next 3Y6.7%
EPS Next 5YN/A
Revenue Next Year6.08%
Revenue Next 2Y5.3%
Revenue Next 3Y4.92%
Revenue Next 5YN/A
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 stable.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. ALRM Valuation Analysis
4.1 Price/Earnings Ratio
- ALRM is valuated rather expensively with a Price/Earnings ratio of 17.78.
- 74.73% of the companies in the same industry are more expensive than ALRM, based on the Price/Earnings ratio.
- ALRM's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.70.
- The Price/Forward Earnings ratio is 16.38, which indicates a correct valuation of ALRM.
- Based on the Price/Forward Earnings ratio, ALRM is valued a bit cheaper than the industry average as 71.12% of the companies are valued more expensively.
- ALRM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.84.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.78 | ||
| Fwd PE | 16.38 |
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 82.31% of the companies listed in the same industry.
- 78.70% of the companies in the same industry are more expensive than ALRM, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.05 | ||
| EV/EBITDA | 14.34 |
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.
- ALRM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.08
PEG (5Y)2.18
EPS Next 2Y8.63%
EPS Next 3Y6.7%
5. ALRM Dividend Analysis
5.1 Amount
- ALRM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
ALRM Fundamentals: All Metrics, Ratios and Statistics
46.595
-0.3 (-0.65%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)02-19 2026-02-19/amc
Earnings (Next)05-06 2026-05-06
Inst Owners98.74%
Inst Owner Change5.35%
Ins Owners2.68%
Ins Owner Change-0.58%
Market Cap2.31B
Revenue(TTM)1.01B
Net Income(TTM)132.57M
Analysts76.92
Price Target62.83 (34.84%)
Short Float %5.37%
Short Ratio5.81
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
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)15.98%
Min EPS beat(2)10.12%
Max EPS beat(2)21.85%
EPS beat(4)4
Avg EPS beat(4)14.89%
Min EPS beat(4)10.12%
Max EPS beat(4)21.85%
EPS beat(8)8
Avg EPS beat(8)13.29%
EPS beat(12)12
Avg EPS beat(12)19.73%
EPS beat(16)16
Avg EPS beat(16)18.75%
Revenue beat(2)2
Avg Revenue beat(2)1.21%
Min Revenue beat(2)0.14%
Max Revenue beat(2)2.28%
Revenue beat(4)3
Avg Revenue beat(4)1.15%
Min Revenue beat(4)-0.02%
Max Revenue beat(4)2.28%
Revenue beat(8)6
Avg Revenue beat(8)0.89%
Revenue beat(12)7
Avg Revenue beat(12)0.35%
Revenue beat(16)10
Avg Revenue beat(16)0.5%
PT rev (1m)-10.2%
PT rev (3m)-10.29%
EPS NQ rev (1m)0.84%
EPS NQ rev (3m)0.92%
EPS NY rev (1m)3.88%
EPS NY rev (3m)3.55%
Revenue NQ rev (1m)0.66%
Revenue NQ rev (3m)0.41%
Revenue NY rev (1m)1.88%
Revenue NY rev (3m)1.88%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.78 | ||
| Fwd PE | 16.38 | ||
| P/S | 2.29 | ||
| P/FCF | 17.05 | ||
| P/OCF | 15.09 | ||
| P/B | 2.73 | ||
| P/tB | 4.42 | ||
| EV/EBITDA | 14.34 |
EPS(TTM)2.62
EY5.62%
EPS(NY)2.84
Fwd EY6.1%
FCF(TTM)2.73
FCFY5.87%
OCF(TTM)3.09
OCFY6.63%
SpS20.36
BVpS17.08
TBVpS10.55
PEG (NY)2.08
PEG (5Y)2.18
Graham Number31.73
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.2% | ||
| ROE | 15.63% | ||
| ROCE | 9.07% | ||
| ROIC | 7.43% | ||
| ROICexc | 21.34% | ||
| ROICexgc | 58.06% | ||
| OM | 13.22% | ||
| PM (TTM) | 13.11% | ||
| GM | 66.15% | ||
| FCFM | 13.42% |
ROA(3y)5.97%
ROA(5y)5.28%
ROE(3y)14.83%
ROE(5y)12.48%
ROIC(3y)5.52%
ROIC(5y)4.95%
ROICexc(3y)15.04%
ROICexc(5y)13.14%
ROICexgc(3y)32.02%
ROICexgc(5y)27.27%
ROCE(3y)6.74%
ROCE(5y)6.04%
ROICexgc growth 3Y63%
ROICexgc growth 5Y16.7%
ROICexc growth 3Y40.45%
ROICexc growth 5Y12.42%
OM growth 3Y29.73%
OM growth 5Y7.72%
PM growth 3Y25.19%
PM growth 5Y0.79%
GM growth 3Y3.69%
GM growth 5Y0.92%
F-Score8
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 7.29 | ||
| Debt/EBITDA | 2.98 | ||
| Cap/Depr | 57.07% | ||
| Cap/Sales | 1.74% | ||
| Interest Coverage | 11.88 | ||
| Cash Conversion | 93.23% | ||
| Profit Quality | 102.39% | ||
| Current Ratio | 1.92 | ||
| Quick Ratio | 1.78 | ||
| Altman-Z | 2.45 |
F-Score8
WACC9.65%
ROIC/WACC0.77
Cap/Depr(3y)48.19%
Cap/Depr(5y)56.59%
Cap/Sales(3y)1.58%
Cap/Sales(5y)2.04%
Profit Quality(3y)136.11%
Profit Quality(5y)125.3%
High Growth Momentum
Growth
EPS 1Y (TTM)14.91%
EPS 3Y10.16%
EPS 5Y8.16%
EPS Q2Q%24.14%
EPS Next Y8.57%
EPS Next 2Y8.63%
EPS Next 3Y6.7%
EPS Next 5YN/A
Revenue 1Y (TTM)7.59%
Revenue growth 3Y6.27%
Revenue growth 5Y10.35%
Sales Q2Q%8.02%
Revenue Next Year6.08%
Revenue Next 2Y5.3%
Revenue Next 3Y4.92%
Revenue Next 5YN/A
EBIT growth 1Y23.11%
EBIT growth 3Y37.86%
EBIT growth 5Y18.87%
EBIT Next Year21.58%
EBIT Next 3Y12.51%
EBIT Next 5YN/A
FCF growth 1Y-29.74%
FCF growth 3Y68.65%
FCF growth 5Y10.71%
OCF growth 1Y-25.72%
OCF growth 3Y39.16%
OCF growth 5Y8.47%
ALARM.COM HOLDINGS INC / ALRM FAQ
What is the ChartMill fundamental rating of ALARM.COM HOLDINGS INC (ALRM) stock?
ChartMill assigns a fundamental rating of 5 / 10 to ALRM.
Can you provide the valuation status for ALARM.COM HOLDINGS INC?
ChartMill assigns a valuation rating of 5 / 10 to ALARM.COM HOLDINGS INC (ALRM). This can be considered as Fairly Valued.
Can you provide the profitability details for ALARM.COM HOLDINGS INC?
ALARM.COM HOLDINGS INC (ALRM) has a profitability rating of 7 / 10.
What is the valuation of ALARM.COM HOLDINGS INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for ALARM.COM HOLDINGS INC (ALRM) is 17.78 and the Price/Book (PB) ratio is 2.73.
How financially healthy is ALARM.COM HOLDINGS INC?
The financial health rating of ALARM.COM HOLDINGS INC (ALRM) is 4 / 10.