ALARM.COM HOLDINGS INC (ALRM) Stock Fundamental Analysis
NASDAQ:ALRM - Nasdaq - US0116421050 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to ALRM. ALRM was compared to 283 industry peers in the Software industry. ALRM scores excellent on profitability, but there are some minor concerns on its financial health. ALRM is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
ALRM had positive earnings in the past year.
ALRM had a positive operating cash flow in the past year.
Each year in the past 5 years ALRM has been profitable.
ALRM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of ALRM (6.09%) is better than 79.27% of its industry peers.
With an excellent Return On Equity value of 17.08%, ALRM belongs to the best of the industry, outperforming 85.82% of the companies in the same industry.
The Return On Invested Capital of ALRM (4.95%) is better than 75.27% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ALRM is significantly below the industry average of 11.63%.
The last Return On Invested Capital (4.95%) for ALRM is above the 3 year average (4.36%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.09% | ||
| ROE | 17.08% | ||
| ROIC | 4.95% |
ROA(3y)5.32%
ROA(5y)6.17%
ROE(3y)12.75%
ROE(5y)12.69%
ROIC(3y)4.36%
ROIC(5y)5.04%
1.3 Margins
Looking at the Profit Margin, with a value of 13.21%, ALRM is in the better half of the industry, outperforming 78.91% of the companies in the same industry.
ALRM's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 11.55%, ALRM is in the better half of the industry, outperforming 79.64% of the companies in the same industry.
In the last couple of years the Operating Margin of ALRM has grown nicely.
The Gross Margin of ALRM (65.30%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of ALRM has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.55% | ||
| PM (TTM) | 13.21% | ||
| GM | 65.3% |
OM growth 3Y11.98%
OM growth 5Y2.86%
PM growth 3Y23.67%
PM growth 5Y4.4%
GM growth 3Y3.35%
GM growth 5Y0.57%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ALRM is destroying value.
The number of shares outstanding for ALRM has been reduced compared to 1 year ago.
ALRM has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, ALRM has a worse debt to assets ratio.
2.2 Solvency
ALRM has an Altman-Z score of 2.98. This is not the best score and indicates that ALRM is in the grey zone with still only limited risk for bankruptcy at the moment.
ALRM has a Altman-Z score (2.98) which is in line with its industry peers.
The Debt to FCF ratio of ALRM is 5.09, which is a neutral value as it means it would take ALRM, 5.09 years of fcf income to pay off all of its debts.
ALRM has a Debt to FCF ratio of 5.09. This is comparable to the rest of the industry: ALRM outperforms 55.27% of its industry peers.
ALRM has a Debt/Equity ratio of 1.35. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.35, ALRM is doing worse than 80.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.35 | ||
| Debt/FCF | 5.09 | ||
| Altman-Z | 2.98 |
ROIC/WACC0.39
WACC12.77%
2.3 Liquidity
ALRM has a Current Ratio of 7.85. This indicates that ALRM is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 7.85, ALRM belongs to the top of the industry, outperforming 94.91% of the companies in the same industry.
A Quick Ratio of 7.38 indicates that ALRM has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 7.38, ALRM belongs to the top of the industry, outperforming 94.18% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 7.85 | ||
| Quick Ratio | 7.38 |
3. Growth
3.1 Past
ALRM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.62%, which is quite good.
Measured over the past years, ALRM shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.16% on average per year.
ALRM shows a small growth in Revenue. In the last year, the Revenue has grown by 6.59%.
Measured over the past years, ALRM shows a quite strong growth in Revenue. The Revenue has been growing by 13.34% on average per year.
EPS 1Y (TTM)9.62%
EPS 3Y4.46%
EPS 5Y8.16%
EPS Q2Q%-6.45%
Revenue 1Y (TTM)6.59%
Revenue growth 3Y7.86%
Revenue growth 5Y13.34%
Sales Q2Q%7.07%
3.2 Future
ALRM is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 2.75% yearly.
The Revenue is expected to grow by 3.96% on average over the next years.
EPS Next Y1.71%
EPS Next 2Y2.75%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year4.58%
Revenue Next 2Y4.32%
Revenue Next 3Y3.88%
Revenue Next 5Y3.96%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 25.48, ALRM can be considered very expensive at the moment.
Based on the Price/Earnings ratio, ALRM is valued a bit cheaper than 74.55% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 29.98. ALRM is around the same levels.
With a Price/Forward Earnings ratio of 25.05, ALRM can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, ALRM is valued a bit cheaper than 72.36% of the companies in the same industry.
ALRM's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.66.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.48 | ||
| Fwd PE | 25.05 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ALRM is valued cheaper than 82.55% of the companies in the same industry.
88.73% of the companies in the same industry are more expensive than ALRM, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.86 | ||
| EV/EBITDA | 19.02 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ALRM does not grow enough to justify the current Price/Earnings ratio.
ALRM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)14.88
PEG (5Y)3.12
EPS Next 2Y2.75%
EPS Next 3YN/A
5. Dividend
5.1 Amount
ALRM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
58.09
-0.03 (-0.05%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners97.72%
Inst Owner Change1.93%
Ins Owners2.65%
Ins Owner Change-0.22%
Market Cap2.87B
Analysts78.67
Price Target75.1 (29.28%)
Short Float %4.93%
Short Ratio6.73
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)15.31%
Min EPS beat(2)6.37%
Max EPS beat(2)24.25%
EPS beat(4)4
Avg EPS beat(4)11.69%
Min EPS beat(4)0.48%
Max EPS beat(4)24.25%
EPS beat(8)8
Avg EPS beat(8)22.15%
EPS beat(12)12
Avg EPS beat(12)20.04%
EPS beat(16)16
Avg EPS beat(16)23.29%
Revenue beat(2)2
Avg Revenue beat(2)0.96%
Min Revenue beat(2)0.03%
Max Revenue beat(2)1.88%
Revenue beat(4)3
Avg Revenue beat(4)0.63%
Min Revenue beat(4)-0.25%
Max Revenue beat(4)1.88%
Revenue beat(8)4
Avg Revenue beat(8)-0.05%
Revenue beat(12)7
Avg Revenue beat(12)0.29%
Revenue beat(16)11
Avg Revenue beat(16)2.73%
PT rev (1m)0%
PT rev (3m)1.38%
EPS NQ rev (1m)-6.83%
EPS NQ rev (3m)-6.83%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)-1.17%
Revenue NQ rev (3m)-1.29%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.48 | ||
| Fwd PE | 25.05 | ||
| P/S | 3.06 | ||
| P/FCF | 14.86 | ||
| P/OCF | 13.91 | ||
| P/B | 3.95 | ||
| P/tB | 5.64 | ||
| EV/EBITDA | 19.02 |
EPS(TTM)2.28
EY3.92%
EPS(NY)2.32
Fwd EY3.99%
FCF(TTM)3.91
FCFY6.73%
OCF(TTM)4.18
OCFY7.19%
SpS19.01
BVpS14.7
TBVpS10.3
PEG (NY)14.88
PEG (5Y)3.12
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.09% | ||
| ROE | 17.08% | ||
| ROCE | 5.87% | ||
| ROIC | 4.95% | ||
| ROICexc | 14.55% | ||
| ROICexgc | 22.24% | ||
| OM | 11.55% | ||
| PM (TTM) | 13.21% | ||
| GM | 65.3% | ||
| FCFM | 20.56% |
ROA(3y)5.32%
ROA(5y)6.17%
ROE(3y)12.75%
ROE(5y)12.69%
ROIC(3y)4.36%
ROIC(5y)5.04%
ROICexc(3y)10.8%
ROICexc(5y)11.57%
ROICexgc(3y)17.63%
ROICexgc(5y)21.62%
ROCE(3y)5.18%
ROCE(5y)5.98%
ROICexcg growth 3Y-6.99%
ROICexcg growth 5Y-4.21%
ROICexc growth 3Y3.2%
ROICexc growth 5Y4.42%
OM growth 3Y11.98%
OM growth 5Y2.86%
PM growth 3Y23.67%
PM growth 5Y4.4%
GM growth 3Y3.35%
GM growth 5Y0.57%
F-Score7
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.35 | ||
| Debt/FCF | 5.09 | ||
| Debt/EBITDA | 7.1 | ||
| Cap/Depr | 44.06% | ||
| Cap/Sales | 1.41% | ||
| Interest Coverage | 19.19 | ||
| Cash Conversion | 149.01% | ||
| Profit Quality | 155.67% | ||
| Current Ratio | 7.85 | ||
| Quick Ratio | 7.38 | ||
| Altman-Z | 2.98 |
F-Score7
WACC12.77%
ROIC/WACC0.39
Cap/Depr(3y)58.68%
Cap/Depr(5y)59.61%
Cap/Sales(3y)2.14%
Cap/Sales(5y)2.36%
Profit Quality(3y)118.74%
Profit Quality(5y)125.77%
High Growth Momentum
Growth
EPS 1Y (TTM)9.62%
EPS 3Y4.46%
EPS 5Y8.16%
EPS Q2Q%-6.45%
EPS Next Y1.71%
EPS Next 2Y2.75%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)6.59%
Revenue growth 3Y7.86%
Revenue growth 5Y13.34%
Sales Q2Q%7.07%
Revenue Next Year4.58%
Revenue Next 2Y4.32%
Revenue Next 3Y3.88%
Revenue Next 5Y3.96%
EBIT growth 1Y62.3%
EBIT growth 3Y20.79%
EBIT growth 5Y16.58%
EBIT Next Year16.35%
EBIT Next 3Y13.14%
EBIT Next 5Y13.18%
FCF growth 1Y58.64%
FCF growth 3Y30.07%
FCF growth 5Y48.34%
OCF growth 1Y51.81%
OCF growth 3Y25.99%
OCF growth 5Y34.38%