Alarm.com Holdings, Inc. (ALRM) Stock Price & How to Invest

Alarm.com Holdings, Inc. runs a cloud platform for connected property: intrusion detection, video surveillance, access control, thermostats, locks, lighting, and the mobile apps that tie them together. It does not sell to homeowners directly. Instead it licenses its software to a network of service providers, dealers, integrators and central monitoring stations, who install the equipment and bill the end customer, while Alarm.com collects a recurring per-property SaaS fee (roughly $5 to $6 a month for a residential account) and also resells hardware into the same channel. Beyond the residential core, the company has built out a commercial franchise (Alarm.com for Business, OpenEye video, CHeKT, Shooter Detection Systems) and an energy business, EnergyHub, that helps utilities orchestrate distributed resources like smart thermostats, batteries and EV chargers.

The investment picture is a profitable subscription compounder with a slower-moving anchor attached. SaaS and license revenue, which is the part investors actually pay for, grew about 10.8% in Q1 2026 to ~$181.5 million with a ~95.4% revenue retention rate, and the company crossed $1 billion in total annual revenue for the first time in 2025. Hardware, roughly a third of the top line, carries thin margins and swings with tariffs, component costs and dealer ordering patterns, and management trimmed second-half 2026 hardware expectations on memory price inflation and a tariff ruling. The balance sheet is clean after retiring $500 million of convertible notes in January 2026, and the stock trades near ~23x trailing earnings, which is a fairly ordinary multiple for a software business growing at this pace and reflects the market's uncertainty about the maturity of U.S. residential security.

The U.S. residential security market is mature, and a large share of Alarm.com's subscriber base sits in a category where DIY alternatives from Amazon Ring, Google Nest and SimpliSafe compete on price and convenience. Channel dependence is structural: Alarm.com does not own the end customer, so a large dealer switching platforms or being acquired by a competitor with an in-house stack can move revenue. Hardware, about a third of revenue, is low margin and exposed to tariffs, memory cost inflation and dealer inventory swings, and management already lowered second-half 2026 hardware guidance for those reasons. Two of the company's biggest partners, ADT and Vivint, have historically had incentives to develop or acquire competing platforms. Patent and trade-secret litigation is a recurring cost of doing business in this space, including an active SkyBell Technologies trade-secrets suit.

5 analysts publish price targets on ALRM, averaging $60.00 against a $56.66 price as of August 2026, or +5.9%. The published targets run from $40.00 to $85.00, a wide spread, and the ratings split 3 buy, 2 hold, 1 sell. Over the last six months there has been 1 raise and 2 cuts among the published actions. A price target is what an analyst published on a date, not a prediction, and sell-side ratings skew positive across the whole market.

Read the full ALRM forecast and price target for the target table, the recent rating actions by firm, and how the consensus has shifted.

We give no verdict on Alarm.com Holdings, Inc.. Both cases are real, which is why the question is contested at all, so here is the strongest version of each.

The case for buying. High-retention SaaS base. SaaS and license revenue rose ~10.8% year over year in Q1 2026 to ~$181.5 million on a ~95.4% revenue retention rate, and management guides to ~$749.5 million to ~$750.5 million for full-year 2026. The most optimistic published target, $85.00, assumes this works close to its best case.

The case against. The U.S. The most pessimistic target, $40.00, is roughly what ALRM is worth if this bites instead.

Read the full bull and bear case on ALRM, including what would have to change to break either one. Walnut is not an investment adviser.

A simple financial snapshot. These are approximations and refresh quarterly; for current figures see Alarm.com Holdings, Inc.'s investor relations page or your broker.

• Revenue (TTM): ~$1.04B (+8.6% YoY)
• Net income (TTM): ~$128M, EPS ~$2.41
• Q1 2026 SaaS and license revenue: ~$181.5M (+10.8% YoY), ~95.4% retention
• Market cap: ~$2.8B at ~$57 a share
• Trailing / forward P/E: ~23x / ~20x
• FY2026 guidance: revenue ~$1.060B to ~$1.071B, adjusted EBITDA ~$215M to ~$216M

Alarm.com trades at roughly 23x trailing earnings and about 20x forward, which is a modest multiple for a software-led business but consistent with high-single-digit to low-double-digit total revenue growth and a hardware drag on blended margins. Q1 2026 delivered ~$265.2 million in revenue (+11%), ~$49.6 million adjusted EBITDA and ~$49.7 million free cash flow, and cash stood at ~$497.4 million after the January 2026 settlement of $500 million of 0% convertible notes. Second-quarter 2026 results were scheduled for August 6, 2026, so the figures here reflect the trailing period through Q1.

Other names that sit close to ALRM: same theme, named as a direct competitor, or held beside it in the same funds. Each entry says which. Worth a look if you are thinking about diversification within a thesis rather than concentration on one ticker.

There are three common ways to get ALRM exposure. Buy shares (or fractional shares) directly at any major broker. Hold an ETF that includes it, which spreads the position across many companies. Or build it into a focused thematic portfolio, so ALRM sits alongside other stocks that express the same thesis.

Walnut takes the portfolio route. Describe a thesis where ALRM fits (for example “AI infrastructure” or “dividend-growth large-caps”) and the AI proposes 5 to 6 constituents with target weights. You review the plan and fund it through your own broker when you're ready.

New to this? Start with how to invest in stocks, see how to analyze a stock with AI, or compare the best AI stock analyzers.

Alarm.com pairs a high-retention subscription platform with a cyclical hardware business, and the question is whether commercial and energy growth can offset a mature residential core.

Whether ALRM is worth buying today depends more on your time horizon and what you already hold than on any single call. We walk through valuation, what would have to go right, and the risks in is ALRM a buy or a sell?, and where the stock could go from here in the ALRM stock forecast.

For income investors, whether ALRM pays a dividend and how the payout looks is covered in does ALRM pay a dividend? And to weigh ALRM against a peer, read the full side-by-side comparisons: ALRM vs REZI and ALRM vs HON.