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ALRM: Product Expansion And Share Buybacks Will Support Balanced Outlook

Rising Compliance Burdens And Supply Issues Will Compress Margins

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ALRM
AnalystLowTarget
Not Invested
Published 05 May 2025

Update shared on 12 Dec 2025

Fair value Increased 10%
Previous
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AnalystLowTarget's Fair Value
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1Y
-22.3%
7D
0.1%

Analysts have raised their price target on Alarm.com Holdings by 10.0 percent, from 50 dollars to 55 dollars, citing slightly higher long term profit margin and valuation assumptions despite somewhat slower projected revenue growth.

What's in the News

  • Launched a low cost Video Intercom Mobile Directory that modernizes multi tenant visitor management with QR code access, mobile video calling, and remote door control, reducing the need for in unit hardware (Key Developments).
  • Entered a strategic partnership with Everon to deliver a unified commercial security console that integrates intrusion protection, access control, video surveillance, and mobile management for multi location enterprises (Key Developments).
  • Introduced the ADC-V730 Wi Fi spotlight camera featuring 4MP video, color night vision, on device video analytics, AI based deterrence, and NDAA compliant construction for residential, commercial, and government deployments (Key Developments).
  • Raised full year 2025 revenue guidance, now expecting about 1.0 billion dollars in total revenue and higher SaaS and license revenue than previously forecast (Key Developments).
  • Continued capital returns through share repurchases, completing buybacks totaling 2,004,480 shares, or just over 4 percent of shares outstanding, under the program launched in February 2023 (Key Developments).

Valuation Changes

  • The fair value estimate has risen by 10.0 percent, from 50.0 dollars to 55.0 dollars, reflecting higher long term margin and valuation assumptions.
  • The discount rate has increased slightly, from 9.63 percent to about 9.64 percent, indicating a marginally higher required return.
  • Revenue growth has been revised down moderately, from about 4.28 percent to about 3.64 percent, pointing to somewhat slower expected top line expansion.
  • The net profit margin has risen modestly, from about 12.90 percent to about 13.45 percent, implying improved long term profitability assumptions.
  • The future P/E has increased slightly, from about 23.5 times to about 24.4 times, suggesting a somewhat higher valuation multiple on expected earnings.

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