Jefferies has adjusted its price target for Alarm.com (ALRM, Financial), reducing it from $78 to $68 while maintaining a Hold rating on the stock. This change is part of the firm's broader evaluation and updates within the software industry sector. The decision reflects a reassessment of expectations and financial models pertaining to Alarm.com's market performance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 8 analysts, the average target price for Alarm.com Holdings Inc (ALRM, Financial) is $69.38 with a high estimate of $85.00 and a low estimate of $50.00. The average target implies an upside of 22.79% from the current price of $56.50. More detailed estimate data can be found on the Alarm.com Holdings Inc (ALRM) Forecast page.
Based on the consensus recommendation from 9 brokerage firms, Alarm.com Holdings Inc's (ALRM, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Alarm.com Holdings Inc (ALRM, Financial) in one year is $62.34, suggesting a upside of 10.34% from the current price of $56.5. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Alarm.com Holdings Inc (ALRM) Summary page.
ALRM Key Business Developments
Release Date: May 08, 2025
- SaaS and License Revenue: $163.8 million, a 9% year-over-year increase.
- Total Revenue: $238.8 million, a 7% year-over-year increase.
- Adjusted EBITDA: $43.5 million, a 17.5% year-over-year increase.
- GAAP Net Income: $27.7 million, an 18.4% year-over-year increase.
- Non-GAAP Adjusted Net Income: $30.4 million, an 11.3% year-over-year increase.
- GAAP EPS: $0.52 per diluted share.
- Non-GAAP Adjusted EPS: $0.54 per diluted share, an 8% year-over-year increase.
- Gross Profit: $160.6 million, a 9.4% year-over-year increase.
- Operating Expenses: $130.9 million; $114.4 million excluding stock-based compensation, a 4.6% year-over-year increase.
- Free Cash Flow: $17.9 million.
- Revenue Retention for Commercial Subscribers: 98%.
- Cash and Cash Equivalents: $1.19 billion.
- 2025 Full-Year Revenue Guidance: $975.8 million to $991.2 million.
- 2025 Full-Year SaaS and License Revenue Guidance: $675.8 million to $676.2 million.
- 2025 Full-Year Non-GAAP Adjusted EBITDA Guidance: $190 million to $193 million.
- 2025 Full-Year Non-GAAP Adjusted Net Income Guidance: $131.5 million to $132.5 million.
- 2025 Full-Year Non-GAAP EPS Guidance: $2.32 to $2.33 per diluted share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Alarm.com Holdings Inc (ALRM, Financial) reported financial results for the first quarter that exceeded expectations, with SaaS and license revenue growing to $163.8 million and adjusted EBITDA reaching $43.5 million.
- The company experienced strong revenue retention in its commercial segment, with a retention rate of 98%, well above the consolidated target range of 92% to 94%.
- The 729 Floodlight video camera product has been successful, with installations in nearly 4,000 properties per month and over 85% of these cameras subscribing to the Perimeter Guard solution.
- EnergyHub, a subsidiary of Alarm.com, announced a strategic partnership with General Motors Energy to integrate GM EVs and home battery storage solutions, enhancing its market position.
- The company has significantly diversified its supply chain, with less than 10% of hardware revenue derived from products shipped from China, reducing exposure to tariff risks.
Negative Points
- The SaaS growth rate is expected to moderate as the year progresses, with guidance for Q2 indicating a growth rate closer to 7%, down from nearly 10% in Q1.
- The residential market in North America is experiencing slower growth due to headwinds such as elevated interest rates affecting new builds and home sales.
- The company faces competitive pressure from low-cost video products entering the market, particularly from Asia, which could impact demand for its higher-priced offerings.
- Alarm.com Holdings Inc (ALRM) is navigating uncertainties related to US tariff policies, which could impact hardware revenue and gross margins.
- The company is experiencing challenges in promoting video services to existing residential customers, as service providers are focused on new installations rather than upgrades.
