ALRM vs HON: How Alarm.com and Honeywell International Compare (2026)
Last updated August 2026
Short answer
HON is the larger of the two ($77.03B market cap): the incumbent the market prices for continued execution (24.27x forward earnings, beta 0.93). ALRM is the smaller challenger ($2.80B), cheaper on forward earnings (19.07x): more room to run, but more to prove. The real question is which set of drivers you believe, and whether owning one (or both) leaves you over-concentrated.
ALRM vs HON: the tie-breaker metrics
Same yardstick, side by side (as of August 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.
| Metric | ALRM | HON | What it tells you |
|---|---|---|---|
| Market cap | $2.80B | $77.03B | Size. The larger name is the incumbent; the smaller has more room to grow and more to prove. |
| Forward P/E | 19.07 | 24.27 | Valuation on next year's expected earnings, the same yardstick for both. Lower is cheaper for that growth; higher means the market is paying up. |
| Trailing P/E | 23.51 | 9.34 | Valuation on the last 12 months. A big drop from trailing to forward means the market expects earnings to jump, so more growth is already in the price. |
| Beta | 0.76 | 0.93 | Volatility vs the market. Above 1 swings harder than the index; below 1 is steadier. Higher beta means bigger drawdowns to hold through. |
| Price vs 52-week range | 84% of range | 73% of range | Where today's price sits between the 52-week low and high. Near the high is momentum with less margin of safety; near the low is out of favor or a discount, depending on why. |
| Price / book | 3.25 | 4.16 | How much you pay over book value. Very high can signal an asset-light, high-return business or a rich price. |
Reading it: ALRM is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.
Before you buy: how ALRM and HON affect your concentration
The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. ALRM and HON share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.
This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined ALRM and HON exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.
What does Alarm.com (ALRM) do?
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.
What does Honeywell International (HON) do?
Honeywell International is a diversified industrial technology conglomerate that makes a broad range of products and software across aerospace, building automation, energy and sustainability, and industrial automation. Its Aerospace segment supplies engines, avionics, and systems for commercial and defense aircraft and earns recurring aftermarket revenue servicing them. Its Building Automation business sells controls, sensors, fire and security systems for commercial buildings. Energy and Sustainability Solutions includes specialty chemicals, materials, and process technologies, while Industrial Automation covers warehouse and process control, sensing, and the productivity (barcode scanning) business. Honeywell makes money from a mix of equipment sales, long-cycle projects, recurring aftermarket service, and growing software offerings. The company has been reshaping its portfolio, spinning off and acquiring businesses to focus on aerospace, automation, and energy transition. Founded in its modern form through a 1999 merger and headquartered in Charlotte, North Carolina, Honeywell is a large, broadly held industrial blue chip.
ALRM vs HON: how do they differ?
Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.
- ALRM drivers: High-retention SaaS base; Commercial and enterprise expansion.
- HON drivers: Aerospace aftermarket strength; Portfolio reshaping and software.
Which fits which kind of investor
A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: The U.S. For HON, as a diversified industrial, Honeywell is exposed to the broad economic cycle, with several segments sensitive to construction, manufacturing capex, and energy markets.
ALRM or HON: which should you pick?
Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick ALRM if you believe its drivers more; HON if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the ALRM and HON guides.
ALRM vs HON: the full fundamentals
ALRM. 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.
HON. Honeywell trades at a valuation typical of a high-quality diversified industrial, reflecting solid margins, strong cash generation, a durable aerospace aftermarket, and a reliable dividend, balanced against modest organic growth and cyclical exposure. The market values its quality and stability while watching whether portfolio reshaping and software can lift growth above the broad industrial average.
Headline figures (approximate, August 2026): ALRM shows 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; HON shows revenue (ttm) ~$39 billion, operating margin ~20%, net income (ttm) ~$5.5 billion, p/e (ttm) ~22x.
The bottom line: ALRM vs HON
ALRM and HON are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined ALRM and HON exposure against your real portfolio. It is not an investment adviser.
Wondering how ALRM or HON fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in Alarm.com with AI
Connect the broker you already use and ask Walnut's AI how ALRM fits what you actually hold: whether you own it already through a fund, what it would do to your concentration, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
What is the difference between ALRM and HON?
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Alarm.com Holdings, Inc. Honeywell International is a diversified industrial technology conglomerate that makes a broad range of products and software across aerospace, building automation, energy and sustainability, and industrial automation. They show up together because they share investment themes, but they are different businesses, so the better fit depends on which thesis you are expressing.
Is ALRM or HON the better stock?
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Neither is universally better. HON is the larger incumbent; ALRM is the smaller challenger and looks cheaper on forward earnings. Walnut is informational, not investment advice. Compare what each does, the tie-breaker metrics above, and the risks, then decide which fits your thesis and what you already own.
Which is cheaper, ALRM or HON?
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On forward P/E (as of August 2026), ALRM trades at 19.07x and HON at 24.27x, so ALRM is the cheaper of the two on next year's expected earnings. A lower multiple is not automatically the better buy: a richer valuation can be justified by faster growth, and a lower one can reflect real risk. Weigh the multiple against how fast each business is compounding.
Should you own both ALRM and HON?
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Because they share themes, owning both concentrates you in that theme. That can be intentional (a focused bet) or accidental (less diversification than it looks). Walnut can show your combined exposure across both, and whether adding either over-concentrates you, before you buy.
What are the risks of ALRM vs HON?
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ALRM: 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. HON: As a diversified industrial, Honeywell is exposed to the broad economic cycle, with several segments sensitive to construction, manufacturing capex, and energy markets. Aerospace is cyclical and vulnerable to airline downturns and travel shocks. The company's breadth can make it harder to grow faster than the overall economy, and portfolio reshaping carries execution and integration risk. Input cost inflation, supply chain constraints, and currency swings affect margins. The productivity solutions (warehouse and barcode) business has shown cyclical softness. The stock has at times traded at a premium that requires consistent execution to justify.
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Walnut is informational, not investment advice. This page is descriptive and not a recommendation to buy or sell ALRM or HON; figures are approximate and dated (as of August 2026). Verify current data before investing.