Arlo Technologies

ARLO

Security & Protection Services · Industrials

Price

$13.31

+0.23 (+1.76%)

Market Cap

$1.45B

Winston Score

Winston is curious

Mixed quality — meaningful strengths and weaknesses.

Share count rising — dilution

+33.2% over 4y

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

Diluted shares outstanding: 82.7M (2021) → 110.2M (2025)

Arlo Technologies makes wireless security cameras and smart home safety devices for everyday consumers. Its main products include indoor and outdoor cameras, video doorbells, and floodlight cameras that let homeowners watch their property from a smartphone. The company spun off from Netgear in 2018 and sells its hardware through major retailers like Best Buy as well as online.

Arlo makes money two ways: selling cameras as hardware and charging monthly or annual subscription fees for cloud video storage and advanced features like package detection and emergency response. Most of its revenue comes from North America, though it has a growing presence in Europe and Australia. The subscription business is the key growth driver, since recurring fees carry higher margins than hardware sales and create a more predictable revenue stream. The main risk is intense competition from Ring, owned by Amazon, and Google Nest, both of which have deeper pockets and larger ecosystems.

Winston Score History

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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

+26.3% YoY

YoY Growth Rate

Revenue accelerating

EPS Growth

>+1,000% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$74M/ year

→ Flat (+1% vs prior year)

13.9% of revenue

3.5x the sector average (4%)

Steady R&D investment year-over-year

Insider Activity

3.0%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$153M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

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

Revenue accelerating

Arlo Technologies grew revenue 26% year-over-year and the growth rate is speeding up. That's the kind of momentum growth investors look for — the question is whether margins can follow.

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

48.3%

Healthy — 48.3% gross margin

Operating Margin

5.0%

Thin — 5.0% operating margin

ROCE

4.6%

Weak — 4.6% 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

+10.8%

Steady sales growth (10.8% YoY)

EPS YoY

N/A

Data not available

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Cash Conversion

247%

Turns 247% of profit into real cash

FCF Margin

11.5%

Modest free cash flow (11.5%)

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

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Stability

Debt / Equity

0.04

Conservative — low debt load (0.04)

Interest Cover

100.00x

—

Comfortably covers interest (100.0x)

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

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Valuation

P/E Ratio (TTM)

46.2x

Expensive — P/E 46.2

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

+31.3

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (46.2 → 14.9)

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Dividends

Not applicable for this business.

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