Alarm.com HoldingsALRM +2.45%87 3-Year ROIIC % is 6.20 as of Dec. 2025, which is 39% below its 10-year median of 10.12. GuruFocus rates ALRM with a GF Score™ of 87/100 and a GF Value™ of $64.99 (Modestly Undervalued). The stock has 2 warning signs investors should review. Among 2,627 Software companies, Alarm.com Holdings ranks better than 52% on this metric.
3-Year Return on Invested Incremental Capital (3-Year ROIIC %) measures the change in earnings as a percentage of change in investment over 3-year.
Alarm.com Holdings's 3-Year ROIIC % for the quarter that ended in Dec. 2025 was 6.20%. High ROIIC is generally an indication that your business is capital efficient or has a higher operating leverage.
The industry rank for Alarm.com Holdings's 3-Year ROIIC % or its related term are showing as below:
ALRM's 3-Year ROIIC % is ranked better than 52% of 2627
companies
in the Software industry
Industry Median: 5.33
vs ALRM: 6.20
Return on Incremental Invested Capital (ROIIC) is an extension of Return on Investment Capital (ROIC). ROIC % tells investors how efficiently that profitability is earned per dollar of company capital. ROIIC narrows the focus even further and shows how profitable each additional unit of capital investment could be. ROIIC % is a more powerful metric than ROIC because it measures how much money the company can generate going forward on future capital investments.
High ROIIC is generally an indication that your business is capital efficient or has a higher operating leverage.
Be Aware
It's important to keep in mind that when tracking ROIIC, the metric is better suited to forecasting the trend of future returns rather than measuring current return on investment.
Alarm.com Holdings 3-Year ROIIC % Related Terms
Alarm.com Holdings 3-Year ROIIC % Historical Data
* Premium members only.
The historical data trend for Alarm.com Holdings's 3-Year ROIIC % 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: 3-Year ROIIC % Comparison
For the Software - Application subindustry, Alarm.com Holdings's 3-Year ROIIC %, along with its competitors' market caps and 3-Year ROIIC % 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 3-Year ROIIC % vs Software Industry
For the Software industry and Technology sector, Alarm.com Holdings's 3-Year ROIIC % distribution charts can be found below:
* The bar in red indicates where Alarm.com Holdings's 3-Year ROIIC % 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.
** Annual data of NOPAT and Invested Capital was used to calculate 3-Year ROIIC %.
*** Please be aware that the ROIIC (Return on Invested Capital) calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
Alarm.com Holdings (ALRM) has a 3-Year ROIIC % of 6.20 as of Dec. 2025. 3-Year ROIIC % measures the change in earnings as a percentage of change in investment over 3-year. View historical data on Alarm.com Holdings and its competitors. This is 39% below median its historical median of 10.12. Over the past decade, Alarm.com Holdings' 3-Year ROIIC % has ranged from 0.05 to 25.11. According to the industry distribution chart, Alarm.com Holdings ranks #1261 out of 2627 companies in the Software industry, placing it in the top 48%.
Is Alarm.com Holdings' 3-Year ROIIC % too high?
Alarm.com Holdings' current 3-Year ROIIC % of 6.20 is 39% below median its 10-year median of 10.12. Over the past 10 years, this metric has ranged from a low of 0.05 to a high of 25.11. The Software industry median 3-Year ROIIC % is 5.33. Alarm.com Holdings' value of 6.20 is 16.3% above this industry median. Based on the distribution chart, Alarm.com Holdings ranks #1261 out of 2627 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' 3-Year ROIIC % compare to BRZE and QNT?
According to the Software industry distribution chart, Alarm.com Holdings ranks #1261 out of 2627 companies for 3-Year ROIIC %. This puts Alarm.com Holdings in the upper half of its industry. The industry median 3-Year ROIIC % is 5.33. Alarm.com Holdings' value of 6.20 is 16.3% above this benchmark. Historically, Alarm.com Holdings' own 3-Year ROIIC % has ranged from 0.05 to 25.11 over the past decade. While the company's 10-year median is 10.12 vs. the industry median of 5.33, 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 3-Year ROIIC % for a Software company?
The median 3-Year ROIIC % among Software companies is 5.33, based on 2,627 companies in the industry. Companies in the top quartile (top 25%) have a 3-Year ROIIC % significantly above this median, while those in the bottom quartile fall well below. However, 3-Year ROIIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Alarm.com Holdings's current 3-Year ROIIC % of 6.20 is 16.3% 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 3-Year ROIIC % mean?
A high 3-Year ROIIC % can signal that a stock is expensive relative to its fundamentals. 3-Year ROIIC % measures the change in earnings as a percentage of change in investment over 3-year. View historical data on Alarm.com Holdings and its competitors. For the Software industry, the median 3-Year ROIIC % is 5.33 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Alarm.com Holdings's current 3-Year ROIIC % is 6.20, which is 39% below median its own 10-year median of 10.12. 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 $64.99, compared to a current price of $49.69 — trading 23.5% below its estimated fair value. The current 3-Year ROIIC % is 6.20, which is 39% below median its 10-year median of 10.12 and 16.3% above the Software industry median of 5.33. 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 3-Year ROIIC % calculated?
3-Year ROIIC % is calculated from a company's financial statements. For Alarm.com Holdings (ALRM), the current 3-Year ROIIC % is 6.20 as of Dec. 2025. 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 $49.69 is trading 23.5% below its estimated GF Value™ of $64.99.
GuruFocus considers Alarm.com Holdings to be Modestly Undervalued.
Key valuation signals for ALRM:
3-Year ROIIC %: 6.20 (39% below median its 10-year median of 10.12)
GF Value™: $64.99 vs. price of $49.69 (23.5% below fair value)
Industry Position: 16.3% above the Software median (#1261 of 2627)
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
Get the complete analysis for ALRM
3-Year ROIIC % 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 
