This is a step-by-step stock review to answer the question, is Alarm.com (ALRM) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is Alarm.com (ALRM) stock a good buy?
- Alarm.com Company history
- MOS
- Meaning
- Moat
- Management
- 4M Score
- Is Alarm.com (ALRM) stock a good buy?
1. Alarm.com Company History
When investing in stocks, it’s important to know the company’s history. This helps us understand the various revenue streams, if they acquired other companies, how they grew through difficult times, and how they separated themselves from the competition.
- Founded in 2000: Alarm.com was established to provide innovative, wireless security solutions for homes and businesses.
- Pioneered Connected Home Technology: In the early 2000s, the company introduced one of the first platforms for remote monitoring and control, setting the stage for the modern smart home.
- Rapid Growth and Expansion: Alarm.com expanded its services to include energy management, video monitoring, and automation, becoming a leader in smart home technology.
- IPO in 2015: The company went public on NASDAQ under the ticker symbol ALRM, boosting its market presence and financial strength.
- Acquisitions: Over the years, Alarm.com acquired companies like Secure-i and ObjectVideo to enhance its video analytics and cloud services.
- Global Reach: Today, Alarm.com powers millions of smart homes and businesses worldwide, offering cutting-edge technology and seamless integration with various devices.
- Continued Innovation: Alarm.com remains at the forefront of the industry, driving advancements in AI, smart security, and IoT solutions
2. MOS (Margin Of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: Watch
- Score: 72
- MOS: 1%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Alarm.com makes money:
- Subscription Services: Generates revenue from recurring subscription fees for its security and automation services provided to residential and commercial customers.
- Installation and Activation Fees: Earns from one-time fees associated with the installation and activation of its security and automation systems.
- Hardware Sales: Profits from selling hardware components, such as sensors, cameras, and control panels, through its network of dealers and partners.
- Software Licensing: Makes money from licensing its technology platform and software solutions to security and automation service providers.
- Dealer Programs: Generates income through programs and partnerships with dealers and service providers who use Alarm.com’s technology to offer services to their customers.
- Value-Added Services: Earns from offering additional features and services, such as advanced video monitoring and cloud storage, which enhance the core security and automation offerings.
Here are a few of the other companies that Alarm.com has acquired over the years. This is important because a company will use a “Buy before build” philosophy to go to market faster and add additional streams of revenue. A company with more revenue streams has a more stable business model. Keep in mind, that most companies don’t build new software because it takes too long to go to market and generate revenue.
- 2GIG Technologies
- OpenEye
- Mayhem Security
- SkyBell Technologies
- SafeHome Security
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Alarm.com stacks up against other companies.
- Paylocity Holding Corporation. (PCTY) – 100
- Manhattan Associates, Inc. (MANH) – 100
- Intuit Inc. (INTU) – 89
- AppFolio, Inc. (APPF) – 84
- SurgePays, Inc. (SURG) – 84
- Alarm.com Holdings, Inc. (ALRM) – 72
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- Leadership Growth:Stephen Trundle Guided Alarm.com through significant growth phases, strengthening its position as a leader in home and business security solutions.
- Product Innovation: Spearheaded the development and launch of new products and features, enhancing the company’s offerings in security and home automation.
- Public Offering: Successfully led Alarm.com through its initial public offering (IPO) in 2015, raising substantial capital and boosting the company’s profile.
- Acquisitions: Directed strategic acquisitions, such as OpenEye and 2GIG Technologies, expanding Alarm.com’s technology and market reach.
- Revenue Growth: Drove consistent revenue growth by increasing the company’s customer base and expanding its service offerings.
- Dealer Network Expansion: Strengthened the dealer network, enhancing the company’s distribution capabilities and market presence.
- Technology Advancements: Focused on advancing the company’s technology platform, improving integration and functionality for both residential and commercial customers.
- Customer Satisfaction: Prioritized customer experience and satisfaction, resulting in strong customer loyalty and high retention rates.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Alarm.com (ALRM) is 53/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is Alarm.com (ALRM) stock a good buy?
Some of the top questions investors can have is Alarm.com (ALRM) stock a good buy or should I buy Alarm.com (ALRM) stock?
Alarm.com is an attractive investment due to its leadership in smart home and security solutions. The company provides comprehensive home automation and security systems, including smart alarms, cameras, and energy management tools. Alarm.com’s innovative technology and strong customer base drive consistent revenue growth and market expansion.
The company has expanded its capabilities through strategic acquisitions, such as OpenEye and 2GIG Technologies, which enhance its offerings in video surveillance and smart home integration. Alarm.com’s focus on maintaining a robust dealer network and advancing its technology platform has bolstered its market position.
However, investors should consider potential competition in the home security and automation market and the need to stay ahead of rapidly evolving technology trends. Despite these challenges, Alarm.com’s strong product lineup, strategic growth initiatives, and leadership in smart home technology make it a promising investment opportunity.
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To truly know if Alarm.com is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
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