Summary: ON SALE
Score: 16/20
MOS: 94%
Share Price: $100
Sticker Price: $1,947
Is Alarm.com stock a good buy?
Alarm.com is a technology company founded in 2000 and based out of Tysons, VA. They provide cloud based services for remote control, home automation, and monitoring services. The monitoring services include contracts through third-party channel partners such as ADT and the services include interactive security, video monitoring, energy management and home automation.
Alarm.com technology specifically allows you to…
- Switch the lights on and off
- Adjust the thermostat
- Close the blinds
- Watch a live video feed
- Open and close the garage door
- Disarm and arm the alarm
- Lock or unlock the doors
With the Alarm.com system, home controls are accessible via a web dashboard or through smartphone applications. Customers can also configure push notifications to stay current on household changes as well as view a history of all actions.
Alarm.com is NOT a direct to consumer play. You may pay for Alarm.com’s products and services through third-party channel partners. For example, let’s say you purchase a new LiftMaster garage door, you can pay a monthly fee for the Alarm.com add-on.
Some of the Alarm.com channel partners include…
- GE
- Lennox
- Leviton
- LiftMaster
- DSC
- SKYBELL
- Nortek
- Mercury Security
- Qualcomm
- SolarEdge
- STELPRO
Alarm.com generates most of it’s revenue through a SaaS (Software as a Service) pricing model where prices range between $35 and $55 per month. I’ve stated this in the past, SaaS is highly scalable and lucrative. Consumers keep paying for a digital service with no inventory replenishments required.
Alarm.com is available in more than 30 countries including…
- Argentina
- Colombia
- India
- Sweden
- Australia
- Bahamas
- Japan
- Malaysia
- Finland
- Mexico
- Brazil
- Iceland
- Span
- UK
- US
This article from investors.com talks about how the pandemic has led to more work-at-home and school-at-home than ever before which has caused people to increase the security of their homes.
If and when we get past this pandemic, we most likely won’t go back to where we were before, especially for the global workforce. Many companies have already made the investment to allow employees to work from home thanks to platforms such as Zoom and Microsoft Teams.
Although schools may fully open back up for in-person grades K-12, education at the college and university level may remain partially online.
Overall, more people will remain to work and learn from home which is causing people to make additional investments on their homes. Security and surveillance are one of those growing demands. This article from globenewswire.com states that the home security market was valued at $53B in 2020 and expected to reach $79B by 2025.
This is a smart business model. It’s not only a SaaS but it’s a SaaS that’s driven through channel partner relationships. The fastest way to scale a business is through channel partner distribution. One partner company, such as GE, can get you access to thousands and sometimes millions of new customers. With a simple $35 – $55 per month add-on, this product certainly has a low barrier-to-entry for consumers around the world.
With a score of 16/20, the financials are very strong. When you look at the WHY page in Tykr, you can see the ROIC is 6/6, the Equity Growth Rate is 3/3, and the EPS Growth Rate is 3/3. Alarm.com is also on the TOP 50 ON SALE. With an MOS of 94% (Share Price of $100 vs Sticker Price of $1,947) this stock has excellent upside potential.
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The Summary, Score, and MOS of this stock may have changed since the posting of this review. Please login to Tykr to see up-to-date information.