Alarm.com Holdings, Inc.
Alarm.com Holdings, Inc. Fundamental Analysis
Alarm.com Holdings, Inc. (ALRM) shows moderate financial fundamentals with a PE ratio of 17.25, profit margin of 13.11%, and ROE of 16.41%. The company generates $1.0B in annual revenue with moderate year-over-year growth of 7.59%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 55.0/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze ALRM's fundamental strength across five key dimensions:
Efficiency Score
WeakALRM struggles to generate sufficient returns from assets.
Valuation Score
ModerateALRM shows balanced valuation metrics.
Growth Score
ModerateALRM shows steady but slowing expansion.
Financial Health Score
ModerateALRM shows balanced financial health with some risks.
Profitability Score
ModerateALRM maintains healthy but balanced margins.
Key Financial Metrics
Is ALRM Expensive or Cheap?
P/E Ratio
ALRM trades at 17.25 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, ALRM's PEG of 4.93 indicates potential overvaluation.
Price to Book
The market values Alarm.com Holdings, Inc. at 2.70 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 10.08 times EBITDA. This signals the market has high growth expectations.
How Well Does ALRM Make Money?
Net Profit Margin
For every $100 in sales, Alarm.com Holdings, Inc. keeps $13.11 as profit after all expenses.
Operating Margin
Core operations generate 13.22 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $16.41 in profit for every $100 of shareholder equity.
ROA
Alarm.com Holdings, Inc. generates $6.20 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Alarm.com Holdings, Inc. produces operating cash flow of $153.53M, showing steady but balanced cash generation.
Free Cash Flow
Alarm.com Holdings, Inc. generates strong free cash flow of $136.19M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.73 in free cash annually.
FCF Yield
ALRM converts 5.96% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
17.25
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
4.93
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.70
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.26
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.26
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.92
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.16
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.09
vs 25 benchmark
How ALRM Stacks Against Its Sector Peers
| Metric | ALRM Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 17.25 | 35.19 | Better (Cheaper) |
| ROE | 16.41% | 1155.00% | Weak |
| Net Margin | 13.11% | -127067.00% (disorted) | Strong |
| Debt/Equity | 1.26 | 0.41 | Weak (High Leverage) |
| Current Ratio | 1.92 | 4.71 | Neutral |
| ROA | 6.20% | -314918.00% (disorted) | Weak |
ALRM outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Alarm.com Holdings, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
60.85%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
67.40%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
47.66%
Industry Style: Growth, Innovation, High Beta
High Growth