NasdaqGS:ALRM

Stock Analysis Report

Executive Summary

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

Rewards

Trading at 11% below its fair value

Revenue is forecast to grow 11.91% per year

Earnings grew by 248% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -24.4% per year for the next 3 years



Snowflake Analysis

Solid track record with excellent balance sheet.


Similar Companies

Share Price & News

How has Alarm.com Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ALRM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

9.9%

ALRM

2.3%

US Software

1.7%

US Market


1 Year Return

-23.8%

ALRM

39.4%

US Software

23.6%

US Market

Return vs Industry: ALRM underperformed the US Software industry which returned 39.8% over the past year.

Return vs Market: ALRM underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

ALRMIndustryMarket
7 Day9.9%2.3%1.7%
30 Day8.3%6.5%3.5%
90 Day-2.9%19.7%11.7%
1 Year-23.8%-23.8%40.6%39.4%26.2%23.6%
3 Year64.5%64.5%144.8%135.0%53.2%43.3%
5 Yearn/a199.4%178.0%75.5%56.1%

Price Volatility Vs. Market

How volatile is Alarm.com Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

4.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ALRM ($43) is trading below our estimate of fair value ($48.33)

Significantly Below Fair Value: ALRM is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: ALRM is good value based on its PE Ratio (42.9x) compared to the Software industry average (47.3x).

PE vs Market: ALRM is poor value based on its PE Ratio (42.9x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: ALRM's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: ALRM is overvalued based on its PB Ratio (6.2x) compared to the US Software industry average (5.9x).


Next Steps

Future Growth

How is Alarm.com Holdings forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

-24.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ALRM's earnings are forecast to decline over the next 3 years (-24.4% per year).

Earnings vs Market: ALRM's earnings are forecast to decline over the next 3 years (-24.4% per year).

High Growth Earnings: ALRM's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ALRM's revenue (11.9% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: ALRM's revenue (11.9% 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


Next Steps

Past Performance

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

50.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ALRM has high quality earnings.

Growing Profit Margin: ALRM's current net profit margins (10.2%) are higher than last year (3.5%).


Past Earnings Growth Analysis

Earnings Trend: ALRM's earnings have grown significantly by 50.9% per year over the past 5 years.

Accelerating Growth: ALRM's earnings growth over the past year (248%) exceeds its 5-year average (50.9% per year).

Earnings vs Industry: ALRM earnings growth over the past year (248%) exceeded the Software industry 20.8%.


Return on Equity

High ROE: ALRM's Return on Equity (14.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Alarm.com Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: ALRM's short term assets ($263.7M) exceed its short term liabilities ($56.7M).

Long Term Liabilities: ALRM's short term assets ($263.7M) exceed its long term liabilities ($108.1M).


Debt to Equity History and Analysis

Debt Level: ALRM's debt to equity ratio (19%) is considered satisfactory.

Reducing Debt: ALRM's debt to equity ratio has increased from 8.8% to 19% over the past 5 years.

Debt Coverage: ALRM's debt is well covered by operating cash flow (77.5%).

Interest Coverage: ALRM earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: ALRM has a low level of unsold assets or inventory.

Debt Coverage by Assets: ALRM's debt is covered by short term assets (assets are 4.1x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.3%forecastin3Years0%

Current dividend yield vs market & industry

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

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


Current Payout to Shareholders

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


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ALRM's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Alarm.com Holdings's salary, the management and board of directors tenure and is there insider trading?

6.4yrs

Average management tenure


CEO

Steve Trundle (50yo)

16.7yrs

Tenure

US$1,941,144

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 ($USD1.94M) is below average for companies of similar size in the US market ($USD3.86M).

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


Management Age and Tenure

6.4yrs

Average Tenure

50yo

Average Age

Experienced Management: ALRM's management team is seasoned and experienced (6.4 years average tenure).


Board Age and Tenure

5.7yrs

Average Tenure

60yo

Average Age

Experienced Board: ALRM's board of directors are considered experienced (5.7 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$55,61020 May 19
Jean-Paul Martin
EntityIndividual
Role
Top Key Executive
Co-Founder & CTO
Shares952
Max PriceUS$58.87
SellUS$74,14020 May 19
Daniel Ramos
EntityIndividual
Role
Head of Corporate Development
Senior VP of Corporate Development & Corporate Secretary
Shares1,269
Max PriceUS$58.87
SellUS$74,14020 May 19
Daniel Kerzner
EntityIndividual
Role
Senior Key Executive
Chief Product Officer
Shares1,269
Max PriceUS$58.87
SellUS$74,14020 May 19
Jeffrey Bedell
EntityIndividual
Role
Senior Key Executive
Chief Strategy & Innovation Officer
Shares1,269
Max PriceUS$58.87
SellUS$146,77503 Apr 19
Stephen Trundle
EntityIndividual
Role
Chief Executive Officer
President
Shares2,271
Max PriceUS$64.63
SellUS$39,23003 Apr 19
Daniel Ramos
EntityIndividual
Role
Head of Corporate Development
Senior VP of Corporate Development & Corporate Secretary
Shares607
Max PriceUS$64.63
SellUS$38,97203 Apr 19
Jean-Paul Martin
EntityIndividual
Role
Top Key Executive
Co-Founder & CTO
Shares603
Max PriceUS$64.63
SellUS$48,99003 Apr 19
Daniel Kerzner
EntityIndividual
Role
Senior Key Executive
Chief Product Officer
Shares758
Max PriceUS$64.63
SellUS$39,23003 Apr 19
Jeffrey Bedell
EntityIndividual
Role
Senior Key Executive
Chief Strategy & Innovation Officer
Shares607
Max PriceUS$64.63

Ownership Breakdown

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


Management Team

  • Steve Valenzuela (62yo)

    Chief Financial Officer

    • Tenure: 3.2yrs
    • Compensation: US$759.52k
  • Steve Trundle (50yo)

    President

    • Tenure: 16.7yrs
    • Compensation: US$1.94m
  • Jeffrey Bedell (50yo)

    Chief Strategy & Innovation Officer

    • Tenure: 6.8yrs
    • Compensation: US$1.11m
  • David Trone

    Vice President of Investor Relations

    • Alison Slavin (40yo)

      Co-Founder & Senior VP of Creation Lab

      • Tenure: 5.9yrs
    • David Hutz (42yo)

      Chief Systems Architect

      • Tenure: 13.9yrs
      • Compensation: US$1.12m
    • Daniel Kerzner (43yo)

      Chief Product Officer

      • Tenure: 6.1yrs
      • Compensation: US$1.24m
    • Jean-Paul Martin (58yo)

      Co-Founder & CTO

      • Compensation: US$285.50k
    • Daniel Ramos (50yo)

      Senior VP of Corporate Development & Corporate Secretary

      • Tenure: 12.6yrs
      • Compensation: US$962.27k
    • Allan Gollinger

      Principal Accounting Officer and Controller

      • Tenure: 3.8yrs

    Board Members

    • Tim McAdam (51yo)

      Chairman

      • Tenure: 4.8yrs
      • Compensation: US$209.99k
    • Hugh Panero (63yo)

      Independent Director

      • Tenure: 9.4yrs
      • Compensation: US$199.99k
    • Don Clarke (59yo)

      Independent Director

      • Tenure: 5.7yrs
      • Compensation: US$204.99k
    • Darius Nevin (61yo)

      Independent Director

      • Tenure: 3.8yrs
      • Compensation: US$76.52k
    • Steve Trundle (50yo)

      President

      • Tenure: 16.7yrs
      • Compensation: US$1.94m
    • Mayo Shattuck (65yo)

      Independent Director

      • Tenure: 5.7yrs
      • Compensation: US$189.99k

    Company Information

    Alarm.com Holdings, Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Alarm.com Holdings, Inc.
    • Ticker: ALRM
    • Exchange: NasdaqGS
    • Founded: 2000
    • Industry: Application Software
    • Sector: Software
    • Market Cap: US$2.236b
    • Shares outstanding: 48.57m
    • Website: https://www.alarm.com

    Number of Employees


    Location

    • Alarm.com Holdings, Inc.
    • 8281 Greensboro Drive
    • Suite 100
    • Tysons
    • Virginia
    • 22102
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    ALRMNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJun 2015
    3RLDB (Deutsche Boerse AG)YesCommon StockDEEURJun 2015
    0HC2LSE (London Stock Exchange)YesCommon StockGBUSDJun 2015

    Biography

    Alarm.com Holdings, Inc. provides cloud-based software platform solutions for smart residential and commercial properties in the United States and internationally. The company provides interactive security solutions to control and monitor their security systems, as well as connected security devices, including door locks, motion sensors, thermostats, garage doors, and video cameras; and high definition video monitoring solutions, such as live streaming, smart clip capture, secure cloud storage, video alerts, continuous HD recording, and commercial video surveillance solutions. It also offers intelligent automation and energy management solutions, including scenes button, which adjust multiple devices; smart thermostat schedules; responsive savings; precision comfort; energy usage and environmental monitoring; geo-services; and demand response programs. In addition, the company provides commercial solutions, such as daily safeguards, commercial grade video, energy savings, protection for valuables and inventory, access control, operational insights, early problem identification, simple to use, professionally supported, and easy to maintain. Further, it offers service provider solutions, including a permission-based online portal that offers account management, sales, marketing, training, and support tools; installation and support tools; business management services; and sales, marketing, and training services, as well as wellness solutions. The company serves residential and business subscribers. Alarm.com Holdings, Inc. was founded in 2000 and is headquartered in Tysons, Virginia. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/20 00:32
    End of Day Share Price2020/01/17 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.