Alarm.com Holdings (ALRM) Raised 2026 Revenue Guidance, Is The Stock Still Cheap?
Alarm.com Holdings (ALRM) is in focus after second quarter 2026 earnings showed higher revenue alongside lower net income, while management raised full year 2026 revenue guidance, giving investors fresh numbers to reassess the stock.
See our latest analysis for Alarm.com Holdings.
Alarm.com Holdings' latest earnings and raised 2026 revenue guidance arrived after a strong 90 day share price return of 26.8% and a 30 day share price return of 4.45%. However, the 1 year total shareholder return is slightly negative, which suggests recent momentum is building off a weaker longer term base.
If this earnings update has you thinking about where else growth stories could emerge in connected tech, it may be worth scanning for other AI focused platforms through the 30 AI small caps.
After Alarm.com Holdings' sharp 90 day rebound and higher full year revenue guidance, the real debate now is whether most of the easy upside is already reflected in the share price or if valuation still leaves meaningful room ahead.
Most Popular Narrative: 11.8% Undervalued
The most followed narrative sees Alarm.com Holdings trading below its fair value estimate of $63, compared with the recent close of $55.57, and focuses on a mix of recurring software revenue and margin assumptions that highlight its long term earnings potential.
Continued global expansion of connected devices and smart home adoption, coupled with Alarm.com's focus on both residential and commercial markets (including international growth and energy/grid management), is expected to drive new subscriber additions and increase recurring SaaS revenue over the long term.
Heightened awareness around security, privacy, and the shift to cloud-based monitoring platforms is underpinning adoption of advanced, AI-powered video analytics and access control solutions, which supports ARPU expansion and margin uplift as consumers and businesses prioritize robust, integrated security.
Want to see what underpins that earnings story for Alarm.com Holdings? The narrative focuses on steady revenue growth, higher margins, and a lower future earnings multiple that still supports a higher long term value. The combination is simple on paper, but the exact assumptions might surprise you.
Result: Fair Value of $63 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, investors still need to weigh risks such as higher hardware tariffs compressing margins, as well as slower international or commercial uptake that could leave Alarm.com Holdings short of optimistic scenarios.
Find out about the key risks to this Alarm.com Holdings narrative.
Next Steps
With Alarm.com Holdings presenting both risks and rewards in the current narrative, it may be helpful to review the full picture for yourself now. To see both sides set out clearly, start with 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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