Alarm.com HoldingsALRM +4.29%87 Return-on-Tangible-Equity is 17.71% as of Mar. 2026, which is 22% below its 10-year median of 22.60. GuruFocus rates ALRM with a GF Score™ of 87/100 and a GF Value™ of $64.95 (Modestly Undervalued). The stock has 2 warning signs investors should review. Among 2,470 Software companies, Alarm.com Holdings ranks better than 71.01% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Alarm.com Holdings's annualized net income for the quarter that ended in Mar. 2026 was $94 Mil. Alarm.com Holdings's average shareholder tangible equity for the quarter that ended in Mar. 2026 was $533 Mil. Therefore, Alarm.com Holdings's annualized Return-on-Tangible-Equity for the quarter that ended in Mar. 2026 was 17.71%.
The historical rank and industry rank for Alarm.com Holdings's Return-on-Tangible-Equity or its related term are showing as below:
ALRM'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 6.75 Med: 22.6 Max: 39.03
Current: 23.71
During the past 13 years, Alarm.com Holdings's highest Return-on-Tangible-Equity was 39.03%. The lowest was 6.75%. And the median was 22.60%.
ALRM's Return-on-Tangible-Equity is ranked better than 71.01% of 2470
companies
in the Software industry
Industry Median: 8.775
vs ALRM: 23.71
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
Alarm.com Holdings Return-on-Tangible-Equity Related Terms
Alarm.com Holdings Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for Alarm.com Holdings's Return-on-Tangible-Equity 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.
ALRM vs BRZE, QNT, SPSC: Return-on-Tangible-Equity Comparison
For the Software - Application subindustry, Alarm.com Holdings's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity 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 Return-on-Tangible-Equity vs Software Industry
For the Software industry and Technology sector, Alarm.com Holdings's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where Alarm.com Holdings's Return-on-Tangible-Equity falls into.
* 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.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Mar. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of 17.71% mean?
Alarm.com Holdings (ALRM) has a Return-on-Tangible-Equity of 17.71% as of Mar. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Alarm.com Holdings and its competitors. This is 22% below median its historical median of 22.60. Over the past decade, Alarm.com Holdings' Return-on-Tangible-Equity has ranged from 6.75 to 39.03. According to the industry distribution chart, Alarm.com Holdings ranks #716 out of 2470 companies in the Software industry, placing it in the top 29%.
Is Alarm.com Holdings' Return-on-Tangible-Equity too high?
Alarm.com Holdings' current Return-on-Tangible-Equity of 17.71% is 22% below median its 10-year median of 22.60. Over the past 10 years, this metric has ranged from a low of 6.75 to a high of 39.03. The Software industry median Return-on-Tangible-Equity is 8.78. Alarm.com Holdings' value of 17.71% is 101.8% above this industry median. Based on the distribution chart, Alarm.com Holdings ranks #716 out of 2470 companies in the Software industry, which is above the industry midpoint. Overall, Alarm.com Holdings has a GF Score™ of 87/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Alarm.com Holdings' Return-on-Tangible-Equity compare to BRZE and QNT?
According to the Software industry distribution chart, Alarm.com Holdings ranks #716 out of 2470 companies for Return-on-Tangible-Equity. This puts Alarm.com Holdings in the upper half of its industry. The industry median Return-on-Tangible-Equity is 8.78. Alarm.com Holdings' value of 17.71% is 101.8% above this benchmark. Historically, Alarm.com Holdings' own Return-on-Tangible-Equity has ranged from 6.75 to 39.03 over the past decade. While the company's 10-year median is 22.60 vs. the industry median of 8.78, 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 Return-on-Tangible-Equity for a Software company?
The median Return-on-Tangible-Equity among Software companies is 8.78, based on 2,470 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Alarm.com Holdings's current Return-on-Tangible-Equity of 17.71% is 101.8% 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 Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Alarm.com Holdings and its competitors. For the Software industry, the median Return-on-Tangible-Equity is 8.78 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Alarm.com Holdings's current Return-on-Tangible-Equity is 17.71%, which is 22% below median its own 10-year median of 22.60. 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 $64.95, compared to a current price of $48.73 — trading 25% below its estimated fair value. The current Return-on-Tangible-Equity is 17.71%, which is 22% below median its 10-year median of 22.60 and 101.8% above the Software industry median of 8.78. 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 Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For Alarm.com Holdings (ALRM), the current Return-on-Tangible-Equity is 17.71% 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 $48.73 is trading 25% below its estimated GF Value™ of $64.95.
GuruFocus considers Alarm.com Holdings to be Modestly Undervalued.
Key valuation signals for ALRM:
Return-on-Tangible-Equity: 17.71% (22% below median its 10-year median of 22.60)
GF Value™: $64.95 vs. price of $48.73 (25% below fair value)
Industry Position: 101.8% above the Software median (#716 of 2470)
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.
87GF Score
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