Alarm.com HoldingsSTU:3RL +3.20%87 Operating Margin % is 11.93% as of Mar. 2026, which is 38% above its 10-year median of 8.67. GuruFocus rates STU:3RL with a GF Score™ of 87/100 and a GF Value™ of €56.93. The stock has 2 warning signs investors should review. Among 2,818 Software companies, Alarm.com Holdings ranks better than 76.76% on this metric.
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Alarm.com Holdings Operating Margin % Related Terms
Alarm.com Holdings Operating Margin % Historical Data
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The historical data trend for Alarm.com Holdings's Operating Margin % 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.
STU:3RL vs GRND, VERX, PLUS: Operating Margin % Comparison
For the Software - Application subindustry, Alarm.com Holdings's Operating Margin %, along with its competitors' market caps and Operating Margin % 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 Operating Margin % vs Software Industry
For the Software industry and Technology sector, Alarm.com Holdings's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Alarm.com Holdings's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Alarm.com Holdings's Operating Margin % for the fiscal year that ended in Dec. 2025 is calculated as
* 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 (STU:3RL) has a Operating Margin % of 11.93% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Alarm.com Holdings and its competitors. This is 38% above median its historical median of 8.67. Over the past decade, Alarm.com Holdings' Operating Margin % has ranged from 2.90 to 13.22. According to the industry distribution chart, Alarm.com Holdings ranks #655 out of 2818 companies in the Software industry, placing it in the top 23.2%.
Is Alarm.com Holdings' Operating Margin % too high?
Alarm.com Holdings' current Operating Margin % of 11.93% is 38% above median its 10-year median of 8.67. Over the past 10 years, this metric has ranged from a low of 2.90 to a high of 13.22. The Software industry median Operating Margin % is 3.87. Alarm.com Holdings' value of 11.93% is 208.7% above this industry median. Based on the distribution chart, Alarm.com Holdings ranks #655 out of 2818 companies in the Software industry, which is in the top quartile — a strong position relative to peers. Overall, Alarm.com Holdings has a GF Score™ of 87/100, reflecting its overall financial health beyond just this single metric.
How does Alarm.com Holdings' Operating Margin % compare to GRND and VERX?
According to the Software industry distribution chart, Alarm.com Holdings ranks #655 out of 2818 companies for Operating Margin %. This places Alarm.com Holdings in the top 23% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 3.87. Alarm.com Holdings' value of 11.93% is 208.7% above this benchmark. Historically, Alarm.com Holdings' own Operating Margin % has ranged from 2.90 to 13.22 over the past decade. While the company's 10-year median is 8.67 vs. the industry median of 3.87, Alarm.com Holdings has consistently been above 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 Operating Margin % for a Software company?
The median Operating Margin % among Software companies is 3.87, based on 2,818 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Alarm.com Holdings's current Operating Margin % of 11.93% is 208.7% above 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 Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Alarm.com Holdings and its competitors. For the Software industry, the median Operating Margin % is 3.87 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Alarm.com Holdings's current Operating Margin % is 11.93%, which is 38% above median its own 10-year median of 8.67. 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?
Alarm.com Holdings (STU:3RL) has a current Operating Margin % of 11.93%. The stock's GF Value™ is €56.93, compared to a current price of €39.03 — trading 31.4% below its estimated fair value. The current Operating Margin % is 11.93%, which is 38% above median its 10-year median of 8.67 and 208.7% above the Software industry median of 3.87. Alarm.com Holdings' overall GF Score™ is 87/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Alarm.com Holdings (STU:3RL), the current Operating Margin % is 11.93% 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 (STU:3RL) Overvalued in 2026?
Based on GuruFocus' analysis, Alarm.com Holdings stock appears to be undervalued.
The current stock price of €39.03 is trading 31.4% below its estimated GF Value™ of €56.93.
Key valuation signals for STU:3RL:
Operating Margin %: 11.93% (38% above median its 10-year median of 8.67)
GF Value™: €56.93 vs. price of €39.03 (31.4% below fair value)
Industry Position: 208.7% above the Software median (#655 of 2818)
No single metric tells the full story. See the STU:3RL 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.
87GF Score
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