Arlo Technologies (ARLO) On Fresh Earnings Interest And The Undervalued Narrative
How Arlo Technologies Earnings Shape The Latest Stock Conversation
Arlo Technologies (ARLO) just reported second quarter and first half 2026 earnings, drawing fresh attention to the stock after revenue and net income figures for the six month period caught investor interest.
The company posted second quarter revenue of US$155.94 million compared with US$129.41 million a year earlier. Net income for the quarter was US$3.03 million versus US$3.12 million in the prior year period, with basic and diluted earnings per share from continuing operations steady at US$0.03.
For the first six months of 2026, Arlo Technologies reported revenue of US$306.32 million compared with US$248.47 million a year ago. Net income for the same period was US$17.91 million compared with US$2.29 million, with basic earnings per share from continuing operations at US$0.17 versus US$0.02 and diluted earnings per share at US$0.16 versus US$0.02.
See our latest analysis for Arlo Technologies.
Arlo Technologies shares currently trade at US$15.47. The stock has a 30 day share price return of 17.46% and a year to date share price return of 16.93%. The 5 year total shareholder return of 152.78% contrasts with a 1 year total shareholder return that is down 5.84%, which hints that momentum has cooled recently even after the latest earnings update.
If Arlo Technologies has your attention after this earnings release, you may also want to see what is happening elsewhere in connected devices and AI enabled security. A practical next step is to scan the market using our screener for 69 profitable AI stocks that aren't just burning cash
With Arlo Technologies up strongly over the past month but weaker over the past year, the latest move raises a simple question: Are investors now pricing in a sturdier business, or just a change in mood around the stock?
Most Popular Narrative: 27.7% Undervalued
The most followed narrative currently sees Arlo Technologies trading below an assessed fair value of $21.40, compared with the recent close at $15.47. That framework leans heavily on the shift toward subscriptions and services as the core driver behind the valuation gap.
Continual migration of subscribers to higher-priced AI-driven service tiers (Arlo Secure 6) and the corresponding increase in ARPU (now over $15, up 26% y/y) reinforces the long-term shift to recurring, high-margin (85% non-GAAP service margin) subscription revenue, supporting expanding net margins and earnings visibility.
This raises the question of what kind of revenue mix and margin profile could support that fair value for Arlo Technologies. The narrative leans on recurring cash flows, rising profitability and a richer services contribution to justify the gap.
Result: Fair Value of $21.40 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Arlo Technologies still faces clear risks, including pressure on hardware pricing and the possibility that subscription adoption or pricing power softens from here.
Find out about the key risks to this Arlo Technologies narrative.
Next Steps
With mixed sentiment around Arlo Technologies and a balance of risks and rewards in focus, it helps to move fast and check the details yourself. To see how concerns and potential upsides compare side by side, take a closer look at the 4 key rewards and 1 important warning sign
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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