Is Arlo Technologies (ARLO) Undervalued On Raised 2026 Guidance And Subscription Growth?
Arlo Technologies (ARLO) recently reported second quarter 2026 results, highlighting record subscriptions and services revenue, steady earnings per share, and a higher full year outlook for both revenue and diluted EPS.
See our latest analysis for Arlo Technologies.
At a share price of $14.33, Arlo Technologies has seen a 10.66% 90 day share price return and a 7.66% 30 day share price return, while its 5 year total shareholder return of 150.09% contrasts with a 12.99% decline over the past year. This combination suggests longer term momentum along with more recent pressure around expectations and risk.
If Arlo’s move toward connected devices has caught your attention, it can be useful to see what else is happening in related areas and check out 37 robotics and automation stocks.
After Arlo Technologies’ strong subscription gains and guidance raise, the share price rebound is already in motion. The key issue now is whether current expectations still leave meaningful upside, or if most of the re rating is already priced in.
Most Popular Narrative: 33% Undervalued
Arlo Technologies' most followed narrative anchors fair value at $21.40 compared with the last close at $14.33, which implies a sizeable valuation gap that centers on the subscription platform story.
The recently signed strategic partnership with ADT, North America's largest security company, with anticipated impact beginning in 2026, represents a major new channel for unlocking additional services revenue and ARR, contributing to future revenue growth and margin expansion.
Want to see what sits behind that services heavy story? The fair value rests on measured revenue growth, firmer margins and a richer earnings multiple than the sector. Curious which assumptions really carry the model?
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 real pressure from hardware commoditisation and the possibility that customers push back on premium subscription pricing if competition intensifies.
Find out about the key risks to this Arlo Technologies narrative.
Another View on Arlo Technologies’ Valuation
The earlier narrative leans heavily on fair value at $21.40, with a focus on earnings and subscription growth assumptions. A separate check using the current 50.5x P/E against a fair ratio of 19.6x and a US Electronic industry average of 31.6x paints a very different picture of valuation risk.
On this measure, Arlo Technologies screens as expensive even versus peers, and the gap to the fair ratio suggests limited room for error if expectations are not met. That raises a simple question for investors: Is the services story strong enough to justify paying such a premium multiple?
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
With mixed signals around Arlo Technologies' valuation and outlook, now is a good time to review the data yourself and decide where you stand. To see both the potential rewards and the key risks that other investors are focused on, take a closer look at the 3 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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