Alarm.com Holdings (ALRM): Assessing Valuation After Recent Share Price Weakness

Alarm.com Holdings (ALRM) has seen its stock deliver minimal movement over the past month, even as the company has reported steady revenue and net income growth. Investors are keeping an eye on how this performance fits into the company’s broader long-term trajectory.

See our latest analysis for Alarm.com Holdings.

Alarm.com Holdings’ share price has slipped 15.7% so far this year, and the total shareholder return over the past twelve months is down 15.9%. However, the business has continued to grow at a steady pace. While recent momentum is fading, the longer-term outlook may not be determined just yet.

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This recent performance raises a key question: is Alarm.com Holdings currently trading at an attractive discount, or is the market already accounting for much of its future potential?

Most Popular Narrative: 26.6% Undervalued

With Alarm.com Holdings closing at $50.41, the most widely followed narrative suggests a fair value far higher. This implies the market may be missing key catalysts. As debate grows over analysts' fair value, a closer look at the story behind these numbers is warranted.

Expansion in smart home adoption and diversified markets is boosting recurring software revenue, margins, and operating leverage through an asset-light model. Investments in technology, partner networks, and advanced security solutions are reinforcing competitive advantages and driving long-term growth and profitability.

Read the complete narrative.

Curious which bold financial projections are behind that fair value? There is a growth formula here, with assumptions about future earnings and profit margins that could surprise you. Find out what really drives this valuation and see if you agree with the consensus.

Result: Fair Value of $68.71 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent trade-related costs or a prolonged U.S. housing slowdown could present challenges for Alarm.com Holdings’ margin momentum and limit new subscriber growth.

Find out about the key risks to this Alarm.com Holdings narrative.

Build Your Own Alarm.com Holdings Narrative

If you want a different take or wish to dig into the numbers yourself, it’s easy to shape your own view in just minutes. Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Alarm.com Holdings.

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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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