| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 46 | 24.4x | 17.8x | Around median | |
Growth | 57 | 8.7% | 7.1% | Around median | |
Quality | 83 | 6.0% | 4.5% | Top tier | |
Safety | 80 | 0.5x | 2.6x | Top tier | |
Capital Return | 92 | — | 2.12% | Top tier | |
Momentum | 72 | -1.4% | 2.9% | Top tier | |
Sentiment | 39 | 5 | 3 | Bottom tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Alarm.com provides a cloud-based platform for security and connected property management through a network of service providers, combining recurring software-as-a-service and license revenue with hardware sales. Its core growth drivers include residential security, the OpenEye video surveillance platform for commercial facilities, EnergyHub software for managing distributed energy resources, and the international business, which surpassed one million active subscriber accounts in the second quarter of fiscal 2026. Its indirect model relies on partners for customer acquisition and support, while the company invests heavily in research and development to connect high-margin services to devices that typically remain in service for approximately a decade.
In the second quarter of fiscal 2026, software-as-a-service and license revenue reached $188.8 million, up 11.1% year over year, while hardware and other revenue totaled approximately $89 million, up 5.5%; implying total quarterly revenue of approximately $277.8 million. The company generated generally accepted accounting principles net income of approximately $24.2 million, or $0.48 per diluted share, compared with approximately $34.6 million a year earlier, while adjusted net income increased 17% to $41.1 million and adjusted earnings per share increased 24% to $0.77. Adjusted earnings before interest, taxes, depreciation, and amortization reached $57.7 million, up 15.7%, with a margin of 20.8% that improved by approximately 115 basis points.
The composition of the second quarter of fiscal 2026 reflects a balance between recurring income and hardware growth: growth initiatives in the commercial, EnergyHub, and international businesses represented approximately 35% of revenue and grew collectively by more than 30% year over year, contributing approximately 900 basis points to the growth rate. Hardware recorded a stronger mix due to elevated enterprise demand for commercial video and activity related to low-carbon and renewable fuel credits at EnergyHub, lifting its gross margin by 180 basis points year over year and enabling its gross profit to cover slightly more than 70% of sales and marketing expenses.
Automated analysis for informational purposes only — not investment advice.
The analyst consensus is "Buy," with an average price target of $62.5 and a narrow range between $60 and $65; the average is above the $58.195 high within the 52-week range of $41.49–58.195. The data does not include a valid current price-to-earnings ratio, but management noted during the August 6, 2026, call that repurchase opportunities emerged near a multiple of 12 times at previous low levels; by contrast, the target range assumes achievement of the raised guidance despite the expected slowdown in software-as-a-service and license revenue growth in the third quarter of fiscal 2026.
Figures in the text are as of 2026-08-31; the live price is shown at the top of the page.
Growth came from stable demand in the residential business and accelerating OpenEye, EnergyHub, and international operations. In the second quarter of fiscal 2026, software-as-a-service and license revenue grew 11.1% to $188.8 million, while the growth initiatives collectively grew by more than 30% and came to represent approximately 35% of revenue. As a result, the company raised its total revenue guidance for fiscal 2026 to a range of $1.079–1.089 billion.
OpenEye is the commercial video platform that benefited in the second quarter of fiscal 2026 from enterprises expanding their deployment of surveillance cameras and adopting AI-powered services. Management described the mix as combining new customer logos with subsequent expansions in locations, facilities, and cameras among existing customers, supporting revenue retention. This enterprise demand also contributed to raising hardware gross margin by 180 basis points year over year.
The product targets what the company estimates to be approximately 4–5 million fire panels in the United States and Canada, and Alarm.com has nearly 3,000 service providers that could be candidates to deploy it. The number of installed units approached 1,000 during the first two to three weeks after launch and before the August 6, 2026, call. The device is sold at a margin near breakeven or slightly positive, but the monthly service fee per building is approximately twice the average monthly revenue of a typical residential account.
EnergyHub enables utilities to manage demand through thermostats, electric vehicles, chargers, and batteries at a time when the need to balance power grids is increasing. During the July 4, 2026, holiday, utilities used the platform to run more than 300 demand-response events across more than 30 states and Ontario, shifting 17.5 gigawatt-hours of electricity. Management estimates the platform's penetration at only approximately 2% of the addressable North American market, but cautioned that program timing creates quarterly seasonality in growth.
Adjusted metrics improved, as adjusted earnings before interest, taxes, depreciation, and amortization increased 15.7% to $57.7 million and its margin expanded to 20.8%. Adjusted net income also increased 17% to $41.1 million, and adjusted earnings per share reached $0.77, up 24%. In contrast, accounting net income declined to $24.2 million from $34.6 million, partly due to lower interest income following the repayment of $500 million in convertible notes in January 2026.
Alarm.com ended the second quarter of fiscal 2026 with $479.4 million in cash and generated $37 million in free cash flow. The company repurchased approximately 570 thousand shares for $25 million during the quarter, bringing total purchases since the beginning of fiscal 2025 to 1.8 million shares. It continues to operate under a $150 million repurchase authorization, while expecting to convert 90% of adjusted earnings before interest, taxes, depreciation, and amortization into free cash flow during fiscal 2026.
