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ALRM

NEUTRAL
$46.59 Live
Alarm.com Holdings, Inc. · NASDAQ
Target $58.0 (+24.5%)
$43.0 52W Range $60.76

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AI Analysis

AI-powered fundamental assessment

Confidence
78%
ALRM's Piotroski F-Score of 4/9 indicates weak financial health, signaling potential instability despite moderate profitability and growth. The absence of an Altman Z-Score raises concern about default risk, particularly given a high debt/equity ratio of 1.20. While the company exhibits strong earnings growth (17.9% YoY) and consistent earnings beats (average surprise of 18.19% over last 4 quarters), its valuation at 18.94x P/E is elevated relative to peers and the broader sector. The Graham Number ($30.76) and intrinsic value estimate ($72.57) suggest a significant premium to conservative fair value, driven by growth expectations. Insider selling activity over the past six months further tempers optimism.

Key Strengths

Consistent earnings beat history with an average surprise of 18.19% over the last four quarters
Strong gross margin of 66.15% and operating margin of 13.63% indicate pricing power and operational efficiency
Robust earnings growth of 17.90% YoY and 14.50% Q/Q, outpacing revenue growth
High revenue growth of 8.00% YoY in a competitive software sector
Positive technical momentum in recent months (1M change: +0.3%) despite longer-term underperformance

Key Risks

Piotroski F-Score of 4/9 indicates weak financial health and potential distress signals
Debt/Equity ratio of 1.20 is elevated, especially for a software company with high growth expectations
Insider selling of $2.87M in the last 6 months signals potential lack of confidence from leadership
Current price of $46.59 trades at a significant premium to Graham Number ($30.76), suggesting overvaluation
No Altman Z-Score available; absence of distress risk metric raises red flags for financial stability
AI Fair Value Estimate
Based on comprehensive analysis
$68.2
+46.4% above current price

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