Alarm.com Has Twin Challenges Of Sustainable Growth And Tariff Pricing Pass-Through

(10min)

Summary

  • Alarm.com delivered better-than-expected Q1 2025 results, but US residential growth remains challenged and tariff uncertainties will likely pressure hardware margins.
  • SaaS and international segments are driving higher margins and growth, yet the sustainability of these trends is still uncertain for the second half of 2025.
  • ALRM's capital allocation has been conservative, with opportunistic buybacks offsetting stock-based compensation, but management's future plans remain unclear.
  • I maintain a neutral Hold rating until we see more durable international/commercial growth and the resolution of tariff risks impacting hardware profitability.
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Investment Outlook

Alarm.com (NASDAQ:ALRM)’s most recent financial results beat both revenue and earnings expectations for Q1 2025.

I previously analyzed ALRM in August 2023 with a Hold outlook due to positives from its international

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This article was written by

21.07K Followers

Donovan Jones is a research specialist with 15 years of experience identifying opportunities for IPOs and public software companies.

He also leads the investing group IPO Edge, which offers actionable information on growth stocks through first-look IPO filings, previews on upcoming IPOs, an IPO calendar for tracking what’s on the horizon, a database of U.S. IPOs, and a guide to IPO investing to walk you through the entire IPO lifecycle - from filing to listing to quiet period and lockup expiration dates.

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Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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