Overall ALRM gets a fundamental rating of 5 out of 10. We evaluated ALRM against 278 industry peers in the Software industry. While ALRM has a great profitability rating, there are some minor concerns on its financial health. ALRM has a correct valuation and a medium growth rate.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

ALRM had positive earnings in the past year.
In the past year ALRM had a positive cash flow from operations.
In the past 5 years ALRM has always been profitable.
ALRM had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

ALRM has a Return On Assets of 6.04%. This is in the better half of the industry: ALRM outperforms 74.46% of its industry peers.
ALRM has a better Return On Equity (15.49%) than 83.09% of its industry peers.
ALRM has a better Return On Invested Capital (7.43%) than 76.98% of its industry peers.
ALRM had an Average Return On Invested Capital over the past 3 years of 4.36%. This is significantly below the industry average of 10.74%.
The last Return On Invested Capital (7.43%) for ALRM is above the 3 year average (4.36%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	6.04%
ROE	15.49%
ROIC	7.43%

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

With a decent Profit Margin value of 12.92%, ALRM is doing good in the industry, outperforming 73.74% of the companies in the same industry.
In the last couple of years the Profit Margin of ALRM has grown nicely.
The Operating Margin of ALRM (13.06%) is better than 78.42% of its industry peers.
In the last couple of years the Operating Margin of ALRM has grown nicely.
ALRM has a Gross Margin of 66.03%. This is comparable to the rest of the industry: ALRM outperforms 44.96% of its industry peers.
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	13.06%
PM (TTM)	12.92%
GM	66.03%

OM growth 3Y11.98%

OM growth 5Y2.86%

PM growth 3Y23.67%

PM growth 5Y4.4%

GM growth 3Y3.35%

GM growth 5Y0.57%

More info and screens

ROA

ROE

ROIC

Operating and Profit Margin

Show most profitable peers

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ALRM is destroying value.
The number of shares outstanding for ALRM has been reduced compared to 1 year ago.
Compared to 5 years ago, ALRM has more shares outstanding
Compared to 1 year ago, ALRM has a worse debt to assets ratio.

2.2 Solvency

ALRM has an Altman-Z score of 2.51. 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's Altman-Z score of 2.51 is in line compared to the rest of the industry. ALRM outperforms 56.47% of its industry peers.
ALRM has a debt to FCF ratio of 6.46. This is a slightly negative value and a sign of low solvency as ALRM would need 6.46 years to pay back of all of its debts.
ALRM has a Debt to FCF ratio (6.46) which is in line with its industry peers.
A Debt/Equity ratio of 0.59 indicates that ALRM is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.59, ALRM is doing worse than 67.99% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.59
Debt/FCF	6.46
Altman-Z	2.51

ROIC/WACC0.74

WACC10.01%

2.3 Liquidity

A Current Ratio of 2.06 indicates that ALRM has no problem at all paying its short term obligations.
With a decent Current ratio value of 2.06, ALRM is doing good in the industry, outperforming 60.07% of the companies in the same industry.
A Quick Ratio of 1.92 indicates that ALRM should not have too much problems paying its short term obligations.
ALRM has a Quick ratio (1.92) which is in line with its industry peers.

		Industry Rank	Sector Rank
Current Ratio	2.06
Quick Ratio	1.92

More info and screens

WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

Show peers with great health

3. Growth

3.1 Past

ALRM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.90%.
ALRM shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.16% yearly.
Looking at the last year, ALRM shows a small growth in Revenue. The Revenue has grown by 7.35% in the last year.
ALRM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 13.34% yearly.

EPS 1Y (TTM)6.9%

EPS 3Y4.46%

EPS 5Y8.16%

EPS Q2Q%22.58%

Revenue 1Y (TTM)7.35%

Revenue growth 3Y7.86%

Revenue growth 5Y13.34%

Sales Q2Q%6.61%

3.2 Future

ALRM is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.93% yearly.
The Revenue is expected to grow by 3.96% on average over the next years.

EPS Next Y13.16%

EPS Next 2Y9.59%

EPS Next 3Y7.93%

EPS Next 5YN/A

Revenue Next Year6.95%

Revenue Next 2Y5.52%

Revenue Next 3Y5%

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 stable.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

More info and screens

Find the best growth stocks

Show best growing peers

4. Valuation

4.1 Price/Earnings Ratio

ALRM is valuated rather expensively with a Price/Earnings ratio of 19.73.
Based on the Price/Earnings ratio, ALRM is valued a bit cheaper than 74.82% of the companies in the same industry.
When comparing the Price/Earnings ratio of ALRM to the average of the S&P500 Index (27.21), we can say ALRM is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 17.87, the valuation of ALRM can be described as rather expensive.
Based on the Price/Forward Earnings ratio, ALRM is valued a bit cheaper than 75.90% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ALRM to the average of the S&P500 Index (25.98), we can say ALRM is valued slightly cheaper.

		Industry Rank	Sector Rank
PE	19.73
Fwd PE	17.87

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ALRM indicates a rather cheap valuation: ALRM is cheaper than 83.09% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, ALRM is valued cheaply inside the industry as 83.09% of the companies are valued more expensively.

		Industry Rank	Sector Rank
P/FCF	15.95
EV/EBITDA	14.79

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ALRM has a very decent profitability rating, which may justify a higher PE ratio.