Alarm.com Holdings Inc. Common Stock (ALRM)

FairStock Score: 61/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach Alarm.com as a Graham-style analyst first: what is the business worth, and what am I paying? The company sells a connected-property platform and related services. In fiscal 2025, the year ended 2025-12-31, revenue was $1.0B, net income $131.6M, and diluted EPS $2.46, up from fiscal 2024 revenue of $939.8M, net income of $122.5M, and EPS of $2.29. The FairStock Lynch category is STALWART — steady growth based on profit growth of 11.4% a year over five years and revenue growth of 10.3%. That is a respectable record. However, the latest filed quarter, fiscal Q2 2026 ended 2026-06-30, showed revenue of $277.7M but net income of only $24.2M and diluted EPS of $0.48, versus fiscal Q2 2025 revenue of $254.3M, net income of $34.2M, and EPS of $0.63. So sales grew while profit fell sharply. Financial health looks decent: FairStock’s Piotroski F-Score is 7/9, Altman Z-Score is 3.40, and trailing free cash flow is $186.6M, a 6.8% FCF yield. But return on capital is modest, with ROCE of 4.99%, and D/E is 0.62. Valuation is the rub. At the 2026-10-13 close of $56.29, FairStock calculates a P/E of 24.91, P/B of 3.19, EV/EBITDA of 13.10, and a Graham Number of $29.94, implying a margin of safety of -88.01%. I see a good-enough business with positive cash generation, but the price already assumes better days. A shrinking profit trend and modest returns on capital leave little cushion. I would require either a clearer return to profit growth or a wider discount before calling it compelling.

In plain English: Alarm.com sells software and services that connect and monitor homes and businesses, mainly through security, video, and smart-property tools. The business is profitable and produces cash, but profit has fallen recently even as sales grew. At the recent price, the shares look expensive compared with the company’s current earnings and what its net assets would suggest.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer