Alarm.com Holdings

ALRM

Software - Application · Technology

Price

$53.20

-0.90 (-1.66%)

Market Cap

$2.63B

Exchange

NASDAQ

Winston Score

Winston is curious

Mixed quality — meaningful strengths and weaknesses.

Share count rising — dilution

+13.5% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 51.9M (2021) → 58.9M (2025)

Alarm.com Holdings, Inc. provides cloud-based solutions for smart residential and commercial properties in the United States and internationally. It operates in two segments, Alarm.com and Other. The company provides interactive security solutions to control and monitor their security systems, as well as connected security devices, including door locks, motion sensors, door locks, garage doors, Internet of Things, thermostats, and video cameras; and video monitoring solutions, such as video anal

Winston Score History

Politician Trades

4 trades / 12mo

2 Congressional buys and 2 sells on ALRM in the last 12 months.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+11.0% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

-14.3% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$270M/ year

↑ Rising (+6% vs prior year)

26.7% of revenue

1.8x the sector average (15%)

Investing heavily in future products and technology

Insider Activity

5.2%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$497M cash & investments

Quarterly Free Cash Flow

→ Burn rate stable

Company generates more cash than it spends — no dilution risk from fundraising

Heavy R&D investment

Alarm.com Holdings is putting 27% of revenue into R&D and that number is rising. That's 1.8x the sector average. And they're generating enough cash to self-fund it.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

62.4%

Premium pricing power — 62.4% gross margin

Operating Margin

12.0%

Modest — 12.0% operating margin

ROCE

2.3%

Weak — 2.3% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+8.6%

Steady sales growth (8.6% YoY)

EPS YoY

-2.6%

Earnings shrinking (-2.6% YoY)

Slight earnings drop. Typical near a cyclical low.

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion

140%

Turns 140% of profit into real cash

FCF Margin

16.2%

Converts sales into free cash efficiently (16.2%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

0.58

Conservative — low debt load (0.58)

Interest Cover

8.26x

Comfortably covers interest (8.3x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

20.6x

Growth-priced — P/E 20.6

P/E above the market average. People are paying up for expected growth.

P/E vs Forward

+1.8

GROWING

Earnings expected to grow — slightly cheaper on forward P/E

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Dividends

Not applicable for this business.

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