Alarm.com Holdings (NasdaqGS:ALRM) - Share price, News & Analysis

ALRM fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	1/6
Past Performance	1/6
Financial Health	4/6
Dividends	0/6

ALRM Stock Overview

Alarm.com Holdings, Inc. provides cloud-based solutions for smart residential and commercial properties in the United States and internationally.

Rewards

Trading at 22% below our estimate of its fair value

Earnings are forecast to grow 10.79% per year

Risk Analysis

Large one-off items impacting financial results

Profit margins (5.9%) are lower than last year (13.1%)

Significant insider selling over the past 3 months

Alarm.com Holdings Competitors

ShotSpotter

NasdaqCM:SSTI

US$338.8m

Apple

NasdaqGS:AAPL

US$2.4t

Alphabet

NasdaqGS:GOOGL

US$1.5t

Amazon.com

NasdaqGS:AMZN

US$1.2t

Price History & Performance

Summary of all time highs, changes and price drops for Alarm.com Holdings
Historical stock prices
Current Share Price	US$57.31
52 Week High	US$94.45
52 Week Low	US$54.99
Beta	1.21
1 Month Change	-3.09%
3 Month Change	-21.39%
1 Year Change	-27.92%
3 Year Change	-4.39%
5 Year Change	79.09%
Change since IPO	239.51%

Recent News & Updates

May 04

Estimating The Intrinsic Value Of Alarm.com Holdings, Inc. (NASDAQ:ALRM)

Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Alarm.com Holdings...

Shareholder Returns

	ALRM	US Software	US Market
7D	2.3%	-0.1%	0.7%
1Y	-27.9%	-10.7%	-10.8%

Return vs Industry: ALRM underperformed the US Software industry which returned -10.3% over the past year.

Return vs Market: ALRM underperformed the US Market which returned -10.4% over the past year.

Price Volatility

Is ALRM's price volatile compared to industry and market?
ALRM volatility
ALRM Average Weekly Movement	5.6%
Software Industry Average Movement	11.4%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	2.9%

Stable Share Price: ALRM is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: ALRM's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2000	1,565	Steve Trundle	https://www.alarm.com

Alarm.com Holdings, Inc. provides cloud-based solutions for smart residential and commercial properties in the United States and internationally. It operates in two segments, Alarm.com and Other. The company provides interactive security solutions to control and monitor their security systems, as well as connected security devices, including door locks, motion sensors, door locks, garage doors, Internet of Things, thermostats, and video cameras; and video monitoring solutions, such as video analytics, live streaming, video doorbell, video clips, video alerts, continuous high definition recording, and commercial video surveillance solutions.

Alarm.com Holdings Fundamentals Summary

How do Alarm.com Holdings's earnings and revenue compare to its market cap?
ALRM fundamental statistics
Market Cap	US$2.87b
Earnings (TTM)	US$46.51m
Revenue (TTM)	US$781.91m

61.7x

P/E Ratio

3.7x

P/S Ratio

Is ALRM overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ALRM income statement (TTM)
Revenue	US$781.91m
Cost of Revenue	US$330.22m
Gross Profit	US$451.68m
Other Expenses	US$405.18m
Earnings	US$46.51m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.93
Gross Margin	57.77%
Net Profit Margin	5.95%
Debt/Equity Ratio	84.4%

How did ALRM perform over the long term?

See historical performance and comparison

Valuation

Is Alarm.com Holdings undervalued compared to its fair value and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

22.0%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: ALRM ($57.31) is trading below our estimate of fair value ($73.47)

Significantly Below Fair Value: ALRM is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: ALRM is poor value based on its PE Ratio (61.7x) compared to the US Software industry average (41.9x).

PE vs Market: ALRM is poor value based on its PE Ratio (61.7x) compared to the US market (15.5x).

Price to Earnings Growth Ratio

PEG Ratio: ALRM is poor value based on its PEG Ratio (5.7x)

Price to Book Ratio

PB vs Industry: ALRM is overvalued based on its PB Ratio (5.1x) compared to the US Software industry average (3.6x).

Future Growth

How is Alarm.com Holdings forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

10.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ALRM's forecast earnings growth (10.8% per year) is above the savings rate (1.9%).

Earnings vs Market: ALRM's earnings (10.8% per year) are forecast to grow slower than the US market (12.6% per year).

High Growth Earnings: ALRM's earnings are forecast to grow, but not significantly.

Revenue vs Market: ALRM's revenue (7.2% per year) is forecast to grow slower than the US market (8% per year).

High Growth Revenue: ALRM's revenue (7.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if ALRM's Return on Equity is forecast to be high in 3 years time

Past Performance

How has Alarm.com Holdings performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

25.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ALRM has a large one-off loss of $12.5M impacting its March 31 2022 financial results.

Growing Profit Margin: ALRM's current net profit margins (5.9%) are lower than last year (13.1%).

Past Earnings Growth Analysis

Earnings Trend: ALRM's earnings have grown significantly by 25.5% per year over the past 5 years.

Accelerating Growth: ALRM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ALRM had negative earnings growth (-44.6%) over the past year, making it difficult to compare to the Software industry average (29.6%).

Return on Equity

High ROE: ALRM's Return on Equity (7.9%) is considered low.

Financial Health

How is Alarm.com Holdings's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: ALRM's short term assets ($888.6M) exceed its short term liabilities ($107.5M).

Long Term Liabilities: ALRM's short term assets ($888.6M) exceed its long term liabilities ($539.0M).

Debt to Equity History and Analysis

Debt Level: ALRM has more cash than its total debt.

Reducing Debt: ALRM's debt to equity ratio has increased from 37.1% to 84.4% over the past 5 years.

Debt Coverage: ALRM's debt is not well covered by operating cash flow (13.9%).

Interest Coverage: ALRM's interest payments on its debt are well covered by EBIT (5.3x coverage).

Balance Sheet

Dividend

What is Alarm.com Holdings's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate ALRM's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate ALRM's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ALRM's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ALRM's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as ALRM has not reported any payouts.

Next Steps

Explore strong dividend paying companies in the Software industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

8.3yrs

Average management tenure

CEO

Steve Trundle (52 yo)

19yrs

Tenure

US$3,613,596

Compensation

Mr. Stephen S. Trundle, also known as Steve, has been the President and Chief Executive Officer at Alarm Com Holdings, Inc. since May 2003. Mr. Trundle serves as Chief Executive Officer and President of Al...

CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD3.61M) is below average for companies of similar size in the US market ($USD6.90M).

Compensation vs Earnings: Steve's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.

Leadership Team

Experienced Management: ALRM's management team is seasoned and experienced (8.3 years average tenure).

Board Members

Experienced Board: ALRM's board of directors are considered experienced (6.1 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: ALRM insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/16 00:00
End of Day Share Price	2022/05/16 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31