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    How Rising Revenue And Lower Earnings At Alarm.com (ALRM) Have Changed Its Investment Story

    Simply Wall St·08/19/2026 02:32:42
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    • Alarm.com Holdings, Inc. reported past second-quarter 2026 results showing revenue rising to US$277.73 million from US$254.31 million a year earlier, while net income fell to US$24.25 million from US$34.55 million and diluted EPS from continuing operations declined to US$0.48 from US$0.63.
    • Despite lower profitability, management raised its full-year 2026 total revenue outlook to between US$1.08 billion and US$1.09 billion, including US$325.0 million to US$335.0 million of hardware and other revenue, indicating confidence in the top-line trajectory.
    • Next, we’ll examine how the higher full-year revenue guidance and weaker quarterly earnings reshape Alarm.com’s existing investment narrative and risks.

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    Alarm.com Holdings Investment Narrative Recap

    To own Alarm.com, you need to believe its mix of recurring SaaS revenue and connected devices can keep attracting customers even as competition and hardware costs bite. The latest quarter reinforced that tension: revenue grew, but profits and margins slipped, so the key near term catalyst remains execution on higher full year revenue guidance, while the biggest risk is that rising costs or pricing pressure prevent that growth from translating into stronger earnings. So far, this update does not materially change that balance.

    Among recent developments, the expansion of the share repurchase program up to US$150.0 million stands out alongside the raised 2026 revenue outlook. Together, they show management is committing capital to reducing share count while also expecting higher sales, which may amplify the impact of any eventual earnings recovery on per share metrics. For investors focused on how guidance translates into long term value, this combination is especially relevant.

    Yet, while guidance is higher, investors should still be aware of the risk that hardware margin pressure and supply chain exposure could...

    Read the full narrative on Alarm.com Holdings (it's free!)

    Alarm.com Holdings' narrative projects $1.2 billion revenue and $171.1 million earnings by 2029. This requires 4.7% yearly revenue growth and about a $53 million earnings increase from $117.9 million today.

    Uncover how Alarm.com Holdings' forecasts yield a $63.00 fair value, a 13% upside to its current price.

    Exploring Other Perspectives

    ALRM 1-Year Stock Price Chart
    ALRM 1-Year Stock Price Chart

    The most cautious analysts were already assuming only about 4 percent annual revenue growth to roughly US$1.2 billion, and a lower future P E, so this earnings miss and guidance change could either challenge that pessimism or reinforce their concern that higher costs and weaker pricing power might limit the benefit of top line growth.

    Explore 2 other fair value estimates on Alarm.com Holdings - why the stock might be worth just $63.00!

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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.