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1. Company Snapshot

1.a. Company Description

Alarm.com Holdings, Inc.provides cloud-based solutions for smart residential and commercial properties in the United States and internationally.It operates in two segments, Alarm.com and Other.


The company provides interactive security solutions to control and monitor their security systems, as well as connected security devices, including door locks, motion sensors, door locks, garage doors, Internet of Things, thermostats, and video cameras; and video monitoring solutions, such as video analytics, live streaming, video doorbell, video clips, video alerts, continuous high definition recording, and commercial video surveillance solutions.It also offers intelligent automation and energy management solutions comprising scenes button; smart thermostat schedules; responsive savings; precision comfort; energy usage monitoring; heating, ventilation, and air conditioning monitoring services; whole home water safety solutions; geo-services; and demand response programs.In addition, the company provides commercial solutions, such as daily safeguards, commercial grade video, energy savings, protection for valuables and inventory, temperature monitoring, multi-site management and access control, early identification, simple to use, professionally supported, and easy to maintain.


Further, it offers service provider solutions, including a permission-based online portal that offers account management, sales, marketing, training, and support tools; sales, marketing, and training services; and home builder programs, as well as wellness solutions.The company serves residential and commercial subscribers.Alarm.com Holdings, Inc.


was founded in 2000 and is based in Tysons, Virginia.

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1.b. Last Insights on ALRM

Alarm.com Holdings, Inc.'s recent performance faces challenges. Despite Q3 2025 earnings and revenue beats, with SaaS and license revenue increasing 10.1% to $175.4 million, investors' concerns may linger. A 32.6% upside is predicted by analysts, citing solid growth attributes. However, with Treasury yields steady near 4.1%, the stock's benefit may be impacted. Cwm LLC and Y Intercept Hong Kong Ltd have recently increased and initiated stakes, respectively. ALRM's ranking on Zacks' Strong Buy list further supports growth prospects.

1.c. Company Highlights

2. Alarm.com Beats Q3 2025 Expectations, Raises 2026 Guidance

Alarm.com reported a strong third quarter, with SaaS and license revenue reaching $175.4 million, a 10.1% year-over-year increase. Total revenue grew 6.6% to $256.4 million, and gross profit rose 8.4% to $168.8 million. The company's adjusted EBITDA was $59.2 million, exceeding expectations. Earnings per share (EPS) came in at $0.76, surpassing the estimated $0.62. The company's financial performance was driven by growth across its business, particularly in the energy segment.

Publication Date: Nov -10

📋 Highlights
  • SaaS & License Revenue Growth:: Q3 revenue reached $175.4M, up 10.1% YoY, with 2026 guidance projecting $722–724M.
  • Adjusted EBITDA Outlook Raised:: 2025 guidance raised to $199M (from $195.8M) and 2026 projected at $210–212M, reflecting margin expansion.
  • EnergyHub Growth Momentum:: Contributed 30% of Q3 SaaS revenue, with growth initiatives (EnergyHub, commercial, international) driving 20–25% YoY SaaS growth.
  • Partner Engagement & Product Innovation:: Hosted 200+ service provider partners at the annual summit, showcasing new video products like the 730 spotlight camera.
  • International Revenue Expansion:: Grew from 4% to 6% of total revenue in 2025, with plans to accelerate growth in emerging markets.

Growth Initiatives Drive SaaS Revenue

The company's growth initiatives, including commercial, international, and EnergyHub, continued to drive SaaS revenue growth in the 20% to 25% year-over-year range, accounting for 30% of total SaaS revenue. EnergyHub's progress with its platform strategy is enabling higher-value services for its utility clients, reinforcing its competitive advantage and leading market share in the North American residential market.

2026 Outlook and Valuation

Alarm.com raised its non-GAAP adjusted EBITDA outlook to $199 million and provided a preliminary early look estimate of SaaS and license revenue of between $722 million and $724 million in 2026. The company's guidance implies a revenue growth rate of around 4-5% next year, slightly above analysts' estimates of 4.1%. With a current P/E Ratio of 19.41 and EV/EBITDA of 11.62, the market appears to be pricing in moderate growth expectations. The company's strong cash flow production and significant cash reserves provide ample capacity for corporate development and opportunistic investments.

EnergyHub's Durable Growth

EnergyHub is a significant contributor to Alarm.com's growth initiatives, with a growth rate likely above 20-25%. According to Stephen Trundle, the growth is durable due to various factors, including a low penetration rate of connected thermostats in VPP programs, opportunities in EVs and batteries, and the potential to sign up additional utilities. As Trundle stated, "EnergyHub is a significant contributor to our growth initiatives, with a growth rate likely above 20-25%."

Core Residential Business and International Opportunities

Alarm.com has started incorporating pricing increases into its growth picture, driven by inflation rates. The company is also continuing to build out its international business, with international revenue growing from 4% to 6% of total revenue. Stephen Trundle is optimistic about driving more growth and acceleration in this area.

3. NewsRoom

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Alarm.com Partners with Everon to Launch Full Stack Security Solution

Dec -04

Source: businesswire.com

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Does Alarm.com (ALRM) Have the Potential to Rally 29.41% as Wall Street Analysts Expect?

Dec -03

Source: zacks.com

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Resideo Announces Sale of Grid Services Demand Response Business to EnergyHub

Dec -02

Source: prnewswire.com

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EnergyHub Acquires Resideo Grid Services to Accelerate VPP Growth for Utilities

Dec -02

Source: businesswire.com

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Best Growth Stocks to Buy for Dec.1

Dec -01

Source: zacks.com

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Best Growth Stocks to Buy for Nov. 28

Nov -28

Source: zacks.com

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ALRM vs. ASAZY: Which Stock Is the Better Value Option?

Nov -25

Source: zacks.com

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Best Growth Stocks to Buy for Nov. 25

Nov -25

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.86%)

6. Segments

Alarm.com

Expected Growth: 4.0%

Alarm.com's 4.0% growth driven by increasing adoption of smart home security systems, expansion into new markets, and growing demand for IoT-based security solutions. Strong partnerships with dealers and service providers, innovative product offerings, and strategic acquisitions also contribute to growth.

Other

Expected Growth: 2.0%

Alarm.com Holdings, Inc.'s 2.0% growth is driven by increasing adoption of smart home security systems, expansion into new markets, and strategic partnerships. The company's cloud-based platform and innovative solutions also contribute to its growth, as well as the rising demand for IoT-enabled devices and services.

7. Detailed Products

Smart Home Security

A comprehensive security system that integrates with various devices to provide real-time monitoring and alerts

Video Monitoring

A cloud-based video monitoring solution that provides live and recorded video footage

Energy Management

A smart energy management system that helps homeowners and businesses reduce energy consumption and costs

Wellness

A wellness solution that provides activity tracking, fall detection, and medication reminders for seniors and individuals with disabilities

Business Security

A comprehensive security system designed for businesses, providing intrusion detection, video monitoring, and access control

Fleet Management

A fleet management solution that provides GPS tracking, vehicle diagnostics, and driver behavior analysis

8. Alarm.com Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Alarm.com Holdings, Inc. faces moderate threat from substitutes, as there are limited alternatives to its smart home security solutions. However, the increasing adoption of DIY security systems and smart home devices from other manufacturers poses a moderate threat to the company's market share.

Bargaining Power Of Customers

Alarm.com Holdings, Inc. has a large customer base, but individual customers do not have significant bargaining power. The company's subscription-based model and long-term contracts reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Alarm.com Holdings, Inc. has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's strong relationships with suppliers and its ability to negotiate prices also limit the bargaining power of suppliers.

Threat Of New Entrants

The smart home security market is highly competitive, and new entrants can easily enter the market with innovative solutions. Alarm.com Holdings, Inc. faces a high threat from new entrants, particularly from technology companies and startups.

Intensity Of Rivalry

The smart home security market is highly competitive, with several established players competing for market share. Alarm.com Holdings, Inc. faces intense rivalry from companies like ADT, Vivint, and Frontpoint, which can lead to pricing pressure and increased marketing expenses.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 43.31%
Debt Cost 3.95%
Equity Weight 56.69%
Equity Cost 8.67%
WACC 6.63%
Leverage 76.40%

11. Quality Control: Alarm.com Holdings, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

51.92$

Current Price

51.92$

Potential

-0.00%

Expected Cash-Flows