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Alarm.com Holdings has the Financial Strength Rank of 7.
GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is rated on a scale of 1 to 10 and is based on these factors:
1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.
4. Other debt related ratios.
A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
Alarm.com Holdings's Interest Coverage for the quarter that ended in Jun. 2026 was 9.17.
Alarm.com Holdings's debt to revenue ratio for the quarter that ended in Jun. 2026 was 0.51.
As of today, Alarm.com Holdings's Altman Z-Score is 4.09.
The rank is rated on a scale of 1 to 10. A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
Alarm.com Holdings has the Financial Strength Rank of 7.
Alarm.com Holdings Financial Strength Related Terms
ALRM vs GRND, BRZE, SOUN: Financial Strength Comparison
For the Software - Application subindustry, Alarm.com Holdings's Financial Strength, along with its competitors' market caps and Financial Strength 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 Financial Strength vs Software Industry
For the Software industry and Technology sector, Alarm.com Holdings's Financial Strength distribution charts can be found below:
* The bar in red indicates where Alarm.com Holdings's Financial Strength 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:
Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
The zones of discrimination were as such:
When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.
Alarm.com Holdings has a Z-score of 4.09, indicating it is in Safe Zones. This implies the Z-Score is strong.
Good Sign:
Altman Z-score of 4.09 is strong.
* 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 Financial Strength of 7 as of Jun. 2026. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on Alarm.com Holdings and its competitors. This is near median its historical median of 7.00. Over the past decade, Alarm.com Holdings' Financial Strength has ranged from 5.00 to 9.00.
Is Alarm.com Holdings' Financial Strength too high?
Alarm.com Holdings' current Financial Strength of 7 is near median its 10-year median of 7.00. Over the past 10 years, this metric has ranged from a low of 5.00 to a high of 9.00. Overall, Alarm.com Holdings has a GF Score™ of 94/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Alarm.com Holdings' Financial Strength compare to GRND and BRZE?
Alarm.com Holdings' Financial Strength of 7 can be compared against companies in the Software industry. Historically, Alarm.com Holdings' own Financial Strength has ranged from 5.00 to 9.00 over the past decade. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Financial Strength for a Software company?
A good Financial Strength depends on the Software industry context. However, Financial Strength should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Financial Strength mean?
A high Financial Strength can signal that a stock is expensive relative to its fundamentals. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on Alarm.com Holdings and its competitors. Alarm.com Holdings's current Financial Strength is 7, which is near median its own 10-year median of 7.00. 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 Modestly Undervalued. The stock's GF Value™ is $66.12, compared to a current price of $55.73 — trading 15.7% below its estimated fair value. The current Financial Strength is 7, which is near median its 10-year median of 7.00. Alarm.com Holdings' overall GF Score™ is 94/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Financial Strength calculated?
Financial Strength is calculated from a company's financial statements. For Alarm.com Holdings (ALRM), the current Financial Strength is 7 as of Jun. 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 $55.73 is trading 15.7% below its estimated GF Value™ of $66.12.
GuruFocus considers Alarm.com Holdings to be Modestly Undervalued.
Key valuation signals for ALRM:
Financial Strength: 7 (near median its 10-year median of 7.00)
GF Value™: $66.12 vs. price of $55.73 (15.7% below fair value)
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.
94GF Score
Get the complete analysis for ALRM
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