Assessing Arlo Technologies (ARLO) Valuation After Analyst Support And Samsung SmartThings Partnership

Why Arlo’s recent partnership and analyst attention matter for investors

Arlo Technologies (ARLO) is back on investor radar after several analysts reiterated positive views and the company announced an expanded partnership that integrates its AI security features into Samsung’s SmartThings ecosystem.

Together, these developments highlight growing attention on Arlo’s subscription driven model and its position within connected home security, providing additional context for how the stock’s story is evolving.

See our latest analysis for Arlo Technologies.

Arlo’s recent news is landing against a backdrop where the current share price of US$14.09 sits above its level at the start of the year, with a 30 day share price return of 5.70% and a 90 day share price decline of 19.67%. At the same time, the 1 year total shareholder return of 19.10% and roughly 7x three year total shareholder return point to strong longer term momentum that has cooled in the short term as investors reassess growth expectations and risk around execution.

If Arlo’s smart home traction has you thinking about the wider opportunity in connected tech, this could be a useful moment to scan high growth tech and AI stocks for other ideas riding similar themes.

With analysts setting price targets well above the current US$14.09 share price and our data pointing to an estimated intrinsic value gap, the key question is whether this signals a genuine opportunity or whether the market is already factoring in future growth.

Most Popular Narrative: 39.3% Undervalued

With Arlo Technologies’ fair value in the most followed narrative set at US$23.20 against a last close of US$14.09, the gap between price and expectations is wide enough to make the underlying assumptions worth a closer look.

Continual migration of subscribers to higher priced AI driven service tiers (Arlo Secure 6) and the corresponding increase in ARPU (now over $15, up 26% y/y) reinforces the long term shift to recurring, high margin (85% non GAAP service margin) subscription revenue, supporting expanding net margins and earnings visibility.

Read the complete narrative.

Want to see what kind of revenue mix, margin profile, and earnings trajectory are baked into that fair value gap? The narrative lays out a detailed path that leans heavily on recurring services, richer ARPU, and a specific profit multiple to describe where the price could go next.

Result: Fair Value of $23.20 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this depends on hardware price pressure not eroding margins and on customers continuing to sign up for, and stick with, Arlo’s subscription plans.

Find out about the key risks to this Arlo Technologies narrative.

Build Your Own Arlo Technologies Narrative

If you see the numbers differently or prefer to test your own assumptions, you can build a custom Arlo view in minutes. Do it your way

A great starting point for your Arlo Technologies research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

If Arlo has caught your attention, do not stop here. A few minutes with the right screeners could surface the next stock that reshapes your portfolio.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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