Why Did Arlo Technologies (ARLO) Shares Climb After Its Latest Update?

Arlo Technologies (ARLO) just posted Q2 results with revenue of US$155.9 million, up 20.5% year over year. The company also reported an EPS beat and raised guidance for the next quarter.

Arlo Technologies shares have climbed 3.41% on a 1-day basis and 7.15% over the past week, yet the 1-year total shareholder return is still down 32.97%. The 3-year and 5-year total shareholder returns of 59.88% and 88.84% indicate longer term momentum that has not fully carried through into the recent share price.

See how Arlo Technologies compares with other fast-moving tech stocks using our hand-picked 29 high quality undervalued stocks that highlights companies with solid fundamentals and potential mispricing.

Short term traders just saw Arlo Technologies jump on strong Q2 numbers, while longer term holders are still nursing a steep 1 year decline. Is this the moment to add exposure or wait for a cheaper reset before reassessing valuation?

Most Popular Narrative: 39% Undervalued

On the most followed narrative, Arlo Technologies screens as undervalued, with a fair value estimate of $21.40 against the last close at $13.03. This puts the focus firmly on how durable its subscription engine really is.

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.

See why 12 investors see Arlo Technologies as 39% undervalued.

Result: Fair Value of $21.40 (UNDERVALUED)

Still, the narrative can break if hardware price pressure erodes product profitability or if Arlo Technologies struggles to keep international revenue from losing share.

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

Next Steps

Mixed signals around Arlo Technologies can make the story feel conflicted, so move fast and look through the same numbers driving both concern and optimism by reviewing the 3 key rewards and 2 important warning signs

Looking for more investment ideas beyond Arlo Technologies?

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