Alarm.com Holdings Inc Dossier - Source-backed chat

Alarm.com Holdings Inc

ALRMNASDAQ

SectorInformation Technology

IndustrySoftware - Application

Beta (adjusted)0.85

Intrinsic Value $62.54median of 6 methods · middle span $52-$91based on filings through 30 Jun 2026

Market Price $54.47Price as of 30 Sep 2026

Near fair valueIntrinsic value is 15% above the market price

−50% · IV below pricenear fair value ±15%IV above price · +50%

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Market Cap $2.7B

Enterprise Value $3.3B

Shares Outstanding 54.9M diluted

Moat Rating Narrow

Next Earnings Date5 Nov 2026

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

Alarm.com Holdings, Inc. (ALRM) continues to operate a highly resilient, partner-distributed recurring revenue engine, characterized by high-margin SaaS/licensing growth and exceptional customer retention. The company's Q1 2026 results demonstrated robust execution, with SaaS and license revenue growing 10.8% year-over-year to $181.5 million and a decade-high revenue retention rate of 95.4%. However, the broader software sector faces persistent valuation compression and AI-driven disruption fears, which have kept the stock under pressure. While the retirement of $500 million in convertible notes in January 2026 has cleaned up the balance sheet, it has also reduced interest income, leading to a temporary decline in GAAP net income. Given these mixed dynamics—strong operational execution offset by macro software sector headwinds and cautious Wall Street sentiment—a Hold recommendation is warranted as the market digests the company's updated growth trajectory.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets5 analysts · as of 18 Aug 2026

Low · most bearish analyst$40.00

Mean target$63.00

High · most bullish analyst$85.00

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 18 Sep 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

The bear case reflects potential headwinds from rising hardware and tariff costs, slower international uptake, or market share loss to DIY smart home ecosystems (e.g., Amazon Ring, Google Nest). Additionally, any weakening of key dealer relationships or persistent macro-driven software sector selloffs could compress multiples further, dragging the stock toward its 52-week lows.

Base CaseCentral scenario

The base case assumes Alarm.com successfully executes on its raised FY2026 guidance, driven by steady SaaS growth, expansion in commercial/multi-family markets, and continued momentum in the EnergyHub platform. SaaS and license revenue is expected to reach the guided range of $749.5 million to $750.5 million, with non-GAAP adjusted EBITDA expanding to $215.0 million to $216.0 million. Valuation multiples are expected to stabilize near historical averages as the overhang from the convertible notes is fully resolved.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

Highly predictable recurring revenue model with SaaS and license revenue representing approximately 68% of total revenue.
Exceptional customer loyalty, highlighted by a decade-high SaaS and license revenue retention rate of 95.4% in Q1 2026.
Strong balance sheet with $497.4 million in cash and cash equivalents even after retiring $500 million of convertible senior notes in January 2026.
Expanding addressable market through adjacent growth vectors such as commercial video (OpenEye) and grid-interactive energy management (EnergyHub).

Key Investment Risks

High partner concentration, with the top ten partners historically accounting for a significant portion of total revenue.
Intense competition in the residential smart home market from well-capitalized DIY players like Amazon (Ring) and Google (Nest).
Supply chain and margin pressures from rising memory costs and import tariffs on hardware components.
Reduced interest income following the retirement of convertible notes, which temporarily weighs on GAAP net income.

Thesis Invalidation Triggers

SaaS and license revenue retention rate falling below 93%.
Significant market share loss or termination of relationships with major security dealer partners.
Failure to sustain non-GAAP adjusted EBITDA margin expansion above 20%.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

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Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.