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Alarm.com Holdings

ALRM
56
Software - Application · Technology
Also trades as: 0HC2.L GBP 0.64 (+4.04%)
Price
$64.14
+1.65 (+2.64%)
Market Cap
$3.15B
Exchange
NASDAQ
Winston Score
56
Winston is curious
A decent business — some strong pillars, some weaker.
Data as of Oct 24, 2026 · filings through Jun 30, 2026

§How the score breaks down

Quality
Good
15/30
Growth
Mixed
6/20
Cash Flow
Exceptional
10/10
Stability
Strong
7/10
Valuation
Strong
7/10
Ownership
Good
8/15
Dividends
Not counted
n/a

53 of 95 counted points = Winston Score 56. Pillars marked n/a do not apply to this company and are left out of the total.

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Share count rising — dilution

+13.5% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 51.9M (2021) → 58.9M (2025)

§Winston Score History

The full picture

Alarm.com makes software that powers smart home and business security systems. Its platform connects things like door locks, cameras, thermostats, and alarm sensors so homeowners and businesses can control them from a phone app. The company does not sell directly to customers — instead, it works behind the scenes, providing its technology to thousands of professional security dealers and service providers who install and manage these systems for end users.

Alarm.com earns most of its revenue from recurring software subscriptions that dealers pay on behalf of their subscribers, which creates a steady, predictable income stream. It operates primarily in the United States, with some international presence, and serves millions of connected properties. Its main competitive advantage is its deep integration with a large network of professional dealers, making it difficult for competitors to easily replace its platform. The key growth driver is the continued expansion of smart home and commercial IoT adoption, while its main risk is increasing competition from large tech companies like Google and Amazon entering the connected home space.

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2 Congressional buys and 2 sells on ALRM in the last 12 months.

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+9.2% YoY

YoY Growth Rate

Slow revenue growth

Reported EPS Growth

-29.0% YoY

Quarterly reporting periods ended:

30 Jun 2025: $0.69

30 Jun 2026: $0.49

Reported/statutory EPS, not adjusted or underlying earnings. One-off items can affect this figure. Provider rounding can affect the growth rate.

YoY Growth Rate

Reported EPS decreased year over year

R&D Spend

$270M/ year

↑ Rising (+6% vs prior year)

26.7% of revenue

1.8x the sector average (15%)

Investing heavily in future products and technology

Insider Activity

5.1%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

$712M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Heavy R&D investment

Alarm.com Holdings is putting 27% of revenue into R&D and that number is rising. That's 1.8x the sector average. And they're generating enough cash to self-fund it.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Profit per sale
Gross Margin
65.6%
Premium pricing power — 65.6% gross margin
Profit after running costs
Operating Margin
11.7%
Modest — 11.7% operating margin
Return on the money invested
ROCE
9.6%
Below par — 9.6% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales growth
Sales YoY
+8.7%
Steady sales growth (+8.7% YoY)
Profit growth
EPS YoY
-10.9%
Earnings shrinking (-10.9% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

How steady the profit is
EPS Consistency
4/8 quarters
Earnings inconsistent quarter-to-quarter

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Cash Flow

Profit that turns into cash
Cash Conversion
212%
Turns 212% of profit into real cash
Spare cash per sale
FCF Margin
22.4%
Converts sales into free cash efficiently (22.4%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns
Debt / Equity
0.66
Moderate — manageable debt (0.66)
Covers its interest
Interest Cover
8.69x
Comfortably covers interest (8.7x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

Price vs profit
P/E Ratio (TTM)
26.9x
Growth-priced — P/E 26.9

P/E above the market average. People are paying up for expected growth.

Cheaper or dearer next year
P/E vs Forward
+7.0
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (26.9 → 19.9)

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Dividends

Not applicable for this business.
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