Is Alarm.com Holdings (ALRM) A Bargain On Raised 2026 Revenue Guidance?
Alarm.com Holdings (ALRM) moved into focus after third quarter revenue reached US$279.44 million, net income came in at US$34.44 million, and management raised full year 2026 revenue guidance.
The share price reaction has been mixed in the short term, with Alarm.com Holdings down 1.60% on a 1 day share price return but up 15.31% over 30 days and 27.56% year to date. This signals building momentum that aligns with the stronger revenue guidance and has contributed to a 29.94% 1 year total shareholder return, despite a weaker 5 year total shareholder return of 21.33% in decline.
Scan how Alarm.com Holdings compares with other software and connected-device players showing similar revenue traction and guidance upgrades in our curated 20 high quality undiscovered gems list.
Alarm.com Holdings now trades against a backdrop of stronger guidance but only modest near term share price moves. Are investors responding to business progress or simply rotating sentiment into the stock, and how does that show up in the valuation?
Most Popular Narrative: 6.6% Undervalued
Alarm.com Holdings closed at $65.36 against an analyst consensus Narrative fair value of $70.00. This implies a 6.6% discount based on the analyst consensus Narrative on Simply Wall St that ties together earnings forecasts, margins and a single discounted cash flow framework using an 8.86% discount rate.
The asset-light recurring software model, supported by revenue retention in the 95% range and connected devices that typically stay active for many years, is contributing to operating leverage, with adjusted EBITDA margin of 20.8% in Q2 2026 and guidance for 2026 adjusted EBITDA of US$221 million to US$223 million, which can support higher net margins and cash generation over time.
See why 2 investors see Alarm.com Holdings as 7% undervalued.
Result: Fair Value of $70 (UNDERVALUED)
Still, the narrative around Alarm.com Holdings can break if tariff related pressure on hardware margins persists, or if slower new account growth drags on SaaS and license momentum.
Find out about the key risks to this Alarm.com Holdings narrative.
Next Steps
If the tone around Alarm.com Holdings feels cautiously optimistic, now is a good time to review the numbers yourself and pressure test the story. To see what those potential upsides look like in detail, start with the 2 key rewards.
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