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Upturn AI Summary - About
Alarm.com Holdings Inc(ALRM)
Advisory History & Simulated Performance *
*as per simulation (see disclosures)- ALL
- 1Y
- 1M
- 1W
- BUY Advisory
- SELL Advisory (Profit)
- SELL Advisory (Loss)
- Profit
- Loss
- PASS (Skip)
Stock price based on last close Advisory Performance History (Simulated)
Upturn Advisory & Investor View for ALRM
10/23/2026: ALRM (2-star) has a low Upturn Star Rating. Not recommended to BUY.
Alarm.com is a leading technology provider of cloud-based software for smart home and business security systems. The company is known for its high-margin recurring revenue model and a robust, partner-centric distribution network that provides a strong competitive edge in professional installations. Its primary growth story revolves around expanding into the enterprise commercial sector and enhancing its software with AI-driven video analytics. Key risks include intense competition from well-capitalized tech giants and the challenge of managing third-party dealer dependencies. This stock may suit growth-oriented investors looking for exposure to software-led services, provided they monitor the evolving landscape of smart home integration closely.
How to Read the Upturn Advisory
The Upturn Star Rating and the current BUY, SELL, or PASS advisory are generated by Upturn’s AI advisory engine based on proprietary signal analysis, price behavior, advisory history, and historical signal performance.
Company fundamentals, valuation, risks, and news provide supporting context about the business.
Investor Fit
| Investor style | Fit | Why |
|---|---|---|
| Growth investor | Strong fit | The company maintains a consistent track record of double-digit revenue growth and high-margin recurring software revenue. |
| Momentum investor | Mixed fit | Performance is subject to broader tech sector trends and requires positive signal confirmation before entry. |
| Value investor | Mixed fit | The stock often trades at a premium due to its SaaS-based valuation, which may challenge traditional value criteria. |
| Dividend investor | Weak fit | The company does not pay dividends, making it unsuitable for income-focused portfolios. |
| Low-risk investor | Mixed fit | While the business model is stable, the stock can experience price volatility common to mid-cap technology companies. |
Risk Profile
| Risk factor | Level | Why it matters |
|---|---|---|
| Price volatility | Medium / high | The stock is susceptible to fluctuations typical of growth-oriented technology equities. |
| Valuation risk | Medium | Market expectations for continued growth may lead to significant price adjustments if performance falters. |
| Competition risk (Tech Giants) | High | Intense competition from companies like Amazon and Google could impact market share and pricing power. |
| Business quality | Strong | The company possesses a sticky, high-margin SaaS platform that creates a durable moat within the professional security channel. |
| Dividend income | Low / none | Investors should not expect passive income from this equity. |
| Execution risk | Medium | Successfully managing the transition to commercial markets and scaling AI features is critical for long-term targets. |
Price Behavior
Strong Uptrend
The stock has maintained a strong upward price trend across the last three quarters.
Moderately Choppy
The stock has experienced noticeable price swings while retaining some directional structure.
Analysis of Past Performance
Type Stock | Historic Profit -12.82% | Avg. Invested days 34 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Advisory Rating  | Upturn Advisory Performance  2.0 | Stock Returns Performance  1.0 |
| Profits based on simulation | Last Close 10/23/2026 |
Upturn Scorecard
Upturn Star Rating 
Company Fundamentals
Financial Health Rating
Growth Momentum Score
Ownership
Top 5 Institutional Investors
Unit Economics (Per $1K Revenue)
Economic Dimensions
Quantitative Style Profile
Style Classification
Quality Focused
Key Highlights
Company Size Mid-Cap Stock | Market Capitalization 3.15B USD | Price to earnings Ratio 28.38 | 1Y Target Price 63 |
Price to earnings Ratio 28.38 | 1Y Target Price 63 | ||
Volume (30-day avg) 497.1K shares | Beta 0.76 | 52 Weeks Range 41.49 - 64.41 | Updated Date 10/25/2026 |
52 Weeks Range 41.49 - 64.41 | Updated Date 10/25/2026 | ||
Dividends yield (FY) - | Basic EPS (TTM) 2.26 |
How Company Makes Money
| Business area | What it includes | Retail investor read |
|---|---|---|
| SaaS and Licensing | Monthly recurring fees for access to the cloud platform and advanced video analytics. | This is the core, high-margin business that provides stable and predictable income. |
| Hardware | Sales of security sensors, cameras, and hubs through partner dealers. | This segment facilitates adoption but typically carries lower margins than the software platform. |
Analyzing Revenue: Products, Geography and Growth
Revenue by Products
Product revenue - Year on Year
Valuation
Trailing PE 28.38 | Forward PE 26.25 | Enterprise Value 2.75B | Price to Sales(TTM) 2.97 |
Enterprise Value 2.75B | Price to Sales(TTM) 2.97 | ||
Enterprise Value to Revenue 2.71 | Enterprise Value to EBITDA 12.09 | Shares Outstanding 49.09M | Shares Floating 46.59M |
Shares Outstanding 49.09M | Shares Floating 46.59M | ||
Percent Insiders 5.59 | Percent Institutions 101.84 |
Financial Metrics
🧭 Investment Snapshot
Total Revenue (Scale)
Total money earned from selling products or services before any costs. It is needed to understand the scale of the business and its ability to generate income.
Net Income (Profit)
Final profit after all expenses, interest, and taxes are deducted. It is needed to determine the overall profitability available to shareholders.
Free Cash Flow (Cash Strength)
Cash remaining after operating activities and capital expenditures, showing cash available for growth. It is needed to evaluate the company’s ability to invest, pay dividends, or reduce debt.
📈 Growth & Strength
Operating Income (Core Profit)
Profit from core operations after deducting all operating expenses. It is needed to measure how efficiently the company runs its primary business activities.
EBITDA (Cash Earnings)
Earnings before interest, taxes, depreciation, and amortization, indicating operating cash potential. It is needed to compare operating performance across companies without accounting or financing differences.
Gross Profit (Unit Profitability)
Revenue minus cost of revenue, showing profit after direct production costs. It is needed to evaluate core business profitability before overhead expenses.
🛡️ Financial Safety
Cash (Liquidity Buffer)
Total cash and cash equivalents on hand. It is needed to evaluate immediate liquidity and financial flexibility.
Total Debt (Leverage Risk)
Total debt including both short-term and long-term components. It is needed to assess the company’s leverage and financial risk.
Net Working Capital (Short-Term Health)
Current assets minus current liabilities, indicating short-term liquidity strength. It is needed to assess whether the company can meet its short-term obligations.
🧱 Balance Sheet Strength
Stockholder Equity (Net Worth)
Total equity value held by shareholders. It is needed to understand the net worth of the company from the owners’ perspective.
Total Assets (Asset Base)
The full value of everything the company owns, including cash, inventory, equipment, and investments. It is needed to understand the resource base used to generate revenue.
Income Before Tax (Pre-Tax Earnings)
Income before provision for income taxes. It is needed to analyze profitability independent of tax structures.
⚙️ Cost & Drag Factors
Cost of Revenue (Production Cost)
Direct costs required to produce and deliver the products or services sold. It is needed to assess efficiency in production and service delivery.
Total Operating Expenses (Operating Cost)
Indirect costs of running the business such as salaries, marketing, and administration. It is needed to understand how much it costs to sustain ongoing business operations.
Income Tax Expense (Tax Drag)
Amount of taxes paid or payable to the government. It is needed to evaluate the impact of taxation on overall profitability.
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