Alarm.com HoldingsALRM +3.25%83 Interest Coverage is 8.62 as of Mar. 2026, which is 45% below its 10-year median of 15.71. GuruFocus rates ALRM with a GF Score™ of 83/100 and a GF Value™ of $64.87 (Significantly Undervalued). The stock has 2 warning signs investors should review. Among 1,705 Software companies, Alarm.com Holdings ranks worse than 69.03% on this metric.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's
Operating Income
by its Interest Expense. Alarm.com Holdings's
Operating Income
for the
three
months ended in Mar. 2026 was $32 Mil. Alarm.com Holdings's Interest Expense for the
three
months ended in Mar. 2026 was $-4 Mil.
Alarm.com Holdings's interest coverage for the quarter that ended in Mar. 2026 was 8.62.
The higher the ratio, the stronger the company's financial strength is.
The historical rank and industry rank for Alarm.com Holdings's Interest Coverage or its related term are showing as below:
ALRM'
s Interest Coverage Range Over the Past 10 Years
Min: 3.86 Med: 15.71 Max: 73.99
Current: 8.15
ALRM's Interest Coverage is ranked worse than 69.03% of 1705
companies
in the Software industry
Industry Median: 24.67
vs ALRM: 8.15
Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.
Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .
Alarm.com Holdings Interest Coverage Related Terms
Alarm.com Holdings Interest Coverage Historical Data
* Premium members only.
The historical data trend for Alarm.com Holdings's Interest Coverage can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.
ALRM vs GRND, VERX, PLUS: Interest Coverage Comparison
For the Software - Application subindustry, Alarm.com Holdings's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Alarm.com Holdings Interest Coverage vs Software Industry
For the Software industry and Technology sector, Alarm.com Holdings's Interest Coverage distribution charts can be found below:
* The bar in red indicates where Alarm.com Holdings's Interest Coverage falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Alarm.com Holdings (ALRM) has a Interest Coverage of 8.62 as of Mar. 2026. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on Alarm.com Holdings and its competitors. This is 45% below median its historical median of 15.71. Over the past decade, Alarm.com Holdings' Interest Coverage has ranged from 3.86 to 73.99. According to the industry distribution chart, Alarm.com Holdings ranks #1177 out of 1705 companies in the Software industry, placing it in the top 69%.
Is Alarm.com Holdings' Interest Coverage too high?
Alarm.com Holdings' current Interest Coverage of 8.62 is 45% below median its 10-year median of 15.71. Over the past 10 years, this metric has ranged from a low of 3.86 to a high of 73.99. The Software industry median Interest Coverage is 24.67. Alarm.com Holdings' value of 8.62 is 65.1% below this industry median. Based on the distribution chart, Alarm.com Holdings ranks #1177 out of 1705 companies in the Software industry, which is below the industry midpoint. Overall, Alarm.com Holdings has a GF Score™ of 83/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Alarm.com Holdings' Interest Coverage compare to GRND and VERX?
According to the Software industry distribution chart, Alarm.com Holdings ranks #1177 out of 1705 companies for Interest Coverage. This places Alarm.com Holdings in the lower half of its industry. The industry median Interest Coverage is 24.67. Alarm.com Holdings' value of 8.62 is 65.1% below this benchmark. Historically, Alarm.com Holdings' own Interest Coverage has ranged from 3.86 to 73.99 over the past decade. While the company's 10-year median is 15.71 vs. the industry median of 24.67, Alarm.com Holdings has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Interest Coverage for a Software company?
The median Interest Coverage among Software companies is 24.67, based on 1,705 companies in the industry. Companies in the top quartile (top 25%) have a Interest Coverage significantly above this median, while those in the bottom quartile fall well below. However, Interest Coverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Alarm.com Holdings's current Interest Coverage of 8.62 is 65.1% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Interest Coverage mean?
A high Interest Coverage can signal that a stock is expensive relative to its fundamentals. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on Alarm.com Holdings and its competitors. For the Software industry, the median Interest Coverage is 24.67 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Alarm.com Holdings's current Interest Coverage is 8.62, which is 45% below median its own 10-year median of 15.71. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Alarm.com Holdings stock overvalued right now?
Based on GuruFocus' analysis, Alarm.com Holdings (ALRM) is currently considered Significantly Undervalued. The stock's GF Value™ is $64.87, compared to a current price of $44.47 — trading 31.4% below its estimated fair value. The current Interest Coverage is 8.62, which is 45% below median its 10-year median of 15.71 and 65.1% below the Software industry median of 24.67. Alarm.com Holdings' overall GF Score™ is 83/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Interest Coverage calculated?
Interest Coverage is calculated from a company's financial statements. For Alarm.com Holdings (ALRM), the current Interest Coverage is 8.62 as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Alarm.com Holdings (ALRM) Overvalued in 2026?
Based on GuruFocus' analysis, Alarm.com Holdings stock appears to be undervalued.
The current stock price of $44.47 is trading 31.4% below its estimated GF Value™ of $64.87.
GuruFocus considers Alarm.com Holdings to be Significantly Undervalued.
Key valuation signals for ALRM:
Interest Coverage: 8.62 (45% below median its 10-year median of 15.71)
GF Value™: $64.87 vs. price of $44.47 (31.4% below fair value)
Industry Position: 65.1% below the Software median (#1177 of 1705)
No single metric tells the full story. See the ALRM stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Alarm.com Holdings Inc has a cloud-based platform that offers an expansive suite of IoT solutions addressing world-wide opportunities in the residential, multi-family, small business and enterprise commercial markets. It has two reportable segments: Alarm.com & Other. The Alarm.com segment represents the cloud-based Software platforms for intelligently connected property & related solutions. The other segment is focused on researching, developing & offering residential & commercial automation solutions & energy management products & services in adjacent markets. The majority of revenue is from the Alarm.com segment. The platform allows home & business owners to secure their properties and automate & control an array of connected device.
83GF Score
Get the complete analysis for ALRM
Interest Coverage is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
ALRM has been successfully added to your 
