Can Allegion's (ALLE) Upbeat Outlook and Smart Access Push Reinforce Its Long-Term Growth Narrative?

• Allegion recently reported third quarter results showing higher sales and net income compared to the prior year, and increased its full-year 2025 earnings and revenue growth outlook.
• An innovative update from its Zentra platform now allows residents to use Google Wallet technology for secure, keyless entry in multifamily properties, highlighting Allegion’s push into smart access solutions.
• We'll examine how Allegion's raised profit outlook could influence its investment narrative and expectations for future growth.

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Allegion Investment Narrative Recap

Shareholders in Allegion need conviction in the company's ability to drive sustained growth through smart security innovation and deeper penetration of connected access solutions, while managing risks tied to cyclical nonresidential trends. The raised full-year 2025 outlook following robust third quarter results strengthens near-term confidence, with the main catalyst remaining the momentum in electronics and software-driven offerings; however, any unexpected softening in nonresidential construction remains the most significant risk to watch, and there is no material change to this risk from the latest results.

The recent Zentra announcement, enabling resident key integration with Google Wallet for effortless access in multifamily properties, stands out as an innovation tied directly to Allegion's push for higher-margin, recurring revenue streams and wider adoption of digital access solutions. This capability, aimed at elevating resident experience and operational efficiency, is timely support for Allegion's outlook for earnings and margin expansion in its electronics segment.

By contrast, investors should be aware that any prolonged slowdown in the nonresidential construction cycle could...

Read the full narrative on Allegion (it's free!)

Allegion's narrative projects $4.8 billion revenue and $825.7 million earnings by 2028. This requires 7.1% yearly revenue growth and a $199.5 million earnings increase from $626.2 million today.

Uncover how Allegion's forecasts yield a $179.36 fair value, a 6% upside to its current price.

Exploring Other Perspectives

Three fair value estimates from the Simply Wall St Community span US$137.62 to US$179.36, highlighting a range of individual investor forecasts. With nonresidential trends pivotal to Allegion's potential, consider how your expectations may align or differ from these varied views.

Explore 3 other fair value estimates on Allegion - why the stock might be worth as much as 6% more than the current price!

Build Your Own Allegion Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Allegion research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Allegion research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Allegion's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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