Latest Ratios: P/E Ratio 21.7x · EV/EBITDA 15.5x · ROE 16.0%. (2012–2025 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $2.6B | $3.0B | $3.5B | $3.5B | $2.7B | $4.4B | $5.3B | $2.2B | $2.6B | $1.9B | $1.3B |
| Enterprise Value | $2.8B | $3.2B | $3.4B | $3.4B | $2.6B | $4.2B | $5.2B | $2.1B | $2.5B | $1.8B | $1.2B |
| P/E Ratio → | 21.72 | 20.74 | 26.55 | 42.24 | 46.24 | 83.97 | 67.61 | 40.54 | 120.63 | 63.98 | 132.52 |
| P/S Ratio | 2.61 | 2.97 | 3.75 | 4.00 | 3.23 | 5.88 | 8.53 | 4.30 | 6.13 | 5.47 | 5.10 |
| P/B Ratio | 3.53 | 3.37 | 4.57 | 4.87 | 4.36 | 7.03 | 11.02 | 5.89 | 9.29 | 7.97 | 6.97 |
| P/FCF | 19.29 | 21.94 | 17.96 | 28.98 | 96.18 | 50.19 | 64.62 | 77.74 | 53.01 | 39.71 | 194.65 |
| P/OCF | 17.24 | 19.61 | 17.08 | 25.96 | 47.77 | 42.69 | 51.65 | 45.85 | 42.46 | 32.45 | 76.14 |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 3.14 | 3.58 | 3.81 | 3.12 | 5.56 | 8.38 | 4.28 | 5.94 | 5.40 | 4.59 |
| EV / EBITDA | 15.46 | 17.45 | 22.18 | 30.27 | 28.00 | 40.71 | 61.11 | 26.58 | 71.75 | 35.15 | 56.18 |
| EV / EBIT | 20.72 | 17.03 | 21.94 | 33.17 | 43.96 | 67.09 | 62.55 | 34.73 | 170.93 | 53.14 | 82.25 |
| EV / FCF | — | 23.18 | 17.13 | 27.58 | 92.91 | 47.43 | 63.44 | 77.32 | 51.39 | 39.17 | 175.08 |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 63.1% | 63.1% | 65.3% | 63.1% | 59.3% | 59.2% | 63.2% | 63.5% | 65.3% | 65.7% | 61.9% |
| Operating Margin | 13.4% | 13.4% | 11.5% | 7.6% | 6.1% | 8.2% | 9.1% | 10.0% | 2.9% | 9.8% | 5.4% |
| Net Profit Margin | 13.1% | 13.1% | 13.2% | 9.2% | 6.7% | 7.0% | 12.6% | 10.7% | 5.1% | 8.6% | 3.9% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 16.0% | 16.0% | 16.6% | 12.0% | 9.0% | 9.5% | 18.4% | 16.6% | 8.4% | 13.8% | 5.6% |
| ROA | 6.3% | 6.3% | 7.1% | 5.9% | 4.4% | 5.3% | 12.1% | 10.7% | 5.3% | 9.2% | 4.2% |
| ROIC | 12.2% | 12.2% | 14.0% | 9.2% | 8.4% | 12.1% | 11.4% | 13.7% | 4.5% | 18.9% | 19.9% |
| ROCE | 8.1% | 8.1% | 7.0% | 5.5% | 4.5% | 7.1% | 10.0% | 11.9% | 3.5% | 12.2% | 6.7% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 1.27 | 1.27 | 1.37 | 0.73 | 0.85 | 0.75 | 0.33 | 0.29 | 0.24 | 0.30 | 0.04 |
| Debt / EBITDA | 6.23 | 6.23 | 6.97 | 4.74 | 5.65 | 4.58 | 1.86 | 1.33 | 1.92 | 1.36 | 0.31 |
| Net Debt / Equity | — | 0.19 | -0.21 | -0.24 | -0.15 | -0.39 | -0.20 | -0.03 | -0.28 | -0.11 | -0.70 |
| Net Debt / EBITDA | 0.94 | 0.94 | -1.08 | -1.54 | -0.98 | -2.37 | -1.13 | -0.15 | -2.27 | -0.49 | -6.28 |
| Debt / FCF | — | 1.24 | -0.84 | -1.40 | -3.26 | -2.76 | -1.17 | -0.42 | -1.63 | -0.54 | -19.57 |
| Interest Coverage | 10.79 | 10.79 | 13.41 | 29.53 | 19.00 | 3.89 | 31.88 | 20.80 | 5.01 | 15.66 | 76.69 |
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 1.92 | 1.92 | 7.85 | 5.46 | 5.40 | 7.09 | 4.40 | 3.21 | 3.03 | 3.68 | 4.79 |
| Quick Ratio | 1.78 | 1.78 | 7.38 | 4.91 | 4.70 | 6.51 | 3.91 | 2.76 | 2.72 | 3.37 | 4.53 |
| Cash Ratio | 1.45 | 1.45 | 6.47 | 3.98 | 3.77 | 5.49 | 2.81 | 1.58 | 1.94 | 2.16 | 3.54 |
| Asset Turnover | — | 0.47 | 0.46 | 0.61 | 0.63 | 0.61 | 0.84 | 0.90 | 0.95 | 0.91 | 1.00 |
| Inventory Turnover | 3.95 | 3.95 | 3.73 | 3.38 | 2.96 | 4.06 | 5.14 | 5.37 | 6.34 | 8.20 | 9.43 |
| Days Sales Outstanding | — | 51.20 | 48.97 | 54.08 | 53.84 | 51.44 | 49.21 | 55.49 | 42.98 | 43.76 | 41.67 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | — | — | — | — | — | — | — | — | — | — | — |
| Payout Ratio | — | — | — | — | — | — | — | — | — | — | — |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 4.6% | 4.8% | 3.8% | 2.4% | 2.2% | 1.2% | 1.5% | 2.5% | 0.8% | 1.6% | 0.8% |
| FCF Yield | 5.2% | 4.6% | 5.6% | 3.5% | 1.0% | 2.0% | 1.5% | 1.3% | 1.9% | 2.5% | 0.5% |
| Buyback Yield | 1.6% | 1.4% | 2.1% | 0.8% | 2.9% | 0.0% | 0.1% | 0.0% | 0.0% | 0.0% | 0.0% |
| Total Shareholder Yield | 1.6% | 1.4% | 2.1% | 0.8% | 2.9% | 0.0% | 0.1% | 0.0% | 0.0% | 0.0% | 0.0% |
| Shares Outstanding | — | $59M | $58M | $55M | $55M | $52M | $51M | $50M | $50M | $49M | $48M |
Includes 30+ ratios · 14 years · Updated daily
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Quick answers to the most common questions about buying ALRM stock.
Alarm.com Holdings, Inc.'s current P/E ratio is 21.7x. The historical average is 64.5x. This places it at the 10th percentile of its historical range.
Alarm.com Holdings, Inc.'s current EV/EBITDA is 15.5x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 36.5x.
Alarm.com Holdings, Inc.'s return on equity (ROE) is 16.0%. The historical average is 12.7%.
Based on historical data, Alarm.com Holdings, Inc. is trading at a P/E of 21.7x. This is at the 10th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Alarm.com Holdings, Inc. has 63.1% gross margin and 13.4% operating margin. Operating margin between 10-20% is typical for established companies.
Alarm.com Holdings, Inc.'s Debt/EBITDA ratio is 6.2x, indicating high leverage. A ratio above 4x may signal elevated financial risk.
Key Metrics
Top Statement Risk
Dealer internalization and hardware mix
Metrics are mathematically derived from official filings.
Margin Resilience Amid Mix Shift
Gross margin held at 65.6% in Q2 2026, matching year-ago levels, per the latest income statement, while operating margin dipped to 11.7% from 12.6% a year earlier, suggesting stable core profitability despite hardware volatility.
The stability in gross margin despite a higher hardware mix indicates that the SaaS segment's high-margin recurring revenue is effectively offsetting lower-margin hardware sales. Operating margin compression to 11.7% in Q2 2026 from 12.6% in Q2 2025, as reported in the financials, appears driven by a 19.6% increase in SG&A, which may reflect investments in growth initiatives. Net margin of 8.7% in Q2 2026 is below the 13.6% reported in Q2 2025, but this is partly due to a one-time tax benefit in the prior year, as suggested by the prior income statement analysis. Investors should monitor whether SG&A growth moderates to allow operating leverage to resume.
ROIC Dip Signals Efficiency Challenge
ROIC fell to 2.5% in Q2 2026 from 3.0% in Q2 2025, per the latest balance sheet data, while ROE declined to 2.7% from 4.2%, indicating that returns on invested capital are contracting despite stable margins.
The decline in ROIC and ROE over the past year, as shown in the quarterly data, suggests that the company is deploying more capital per unit of profit, possibly due to increased cash balances and acquisitions. The asset turnover ratio of 0.17 in Q2 2026, down from 0.12 a year earlier, indicates that revenue generation per dollar of assets is improving, but the return metrics remain low because of a large cash and investment base. This may imply that the company is not yet generating sufficient incremental returns on its accumulated capital, a point that warrants monitoring as management deploys cash toward buybacks or M&A.
Working Capital Stretch Pressures Cash Cycle
Cash conversion cycle lengthened to 112 days in Q2 2026 from 78 days in Q2 2025, per the latest balance sheet data, driven by a sharp increase in DPO to 28 days from 59 days, indicating a shift in payment terms.
The elongation of the cash conversion cycle is primarily due to a significant reduction in days payable outstanding, which fell from 59 days in Q2 2025 to 28 days in Q2 2026, as reported in the financials. This suggests that Alarm.com is paying suppliers faster, possibly to secure better terms or due to changes in procurement, which reduces the interest-free financing from suppliers. DSO remained relatively stable at 50 days, while DIO increased slightly to 90 days, indicating that inventory management is not the primary driver. The net effect is a higher working capital requirement, which may pressure free cash flow if not offset by operational improvements.
Deleveraging Enhances Balance Sheet Flexibility
Debt-to-equity fell to 0.62 in Q2 2026 from 1.27 in Q4 2025, per the latest balance sheet, as total debt halved to $567.5M, while interest coverage improved to 9.78x, indicating a more comfortable debt service position.
The substantial reduction in leverage, with total debt dropping from $1.1B to $567.5M, as reported in the balance sheet, suggests a deliberate deleveraging strategy that enhances financial flexibility. Interest coverage of 9.78x in Q2 2026, though lower than the 17.97x in Q2 2024, remains adequate to cover interest expenses comfortably. The D/EBITDA ratio of 13.69x in Q2 2026, down from 28.05x in Q2 2024, indicates that debt is now a smaller multiple of EBITDA, reducing refinancing risk. This improved leverage profile may support future capital deployment, but investors should monitor whether the company maintains this discipline or re-levers for acquisitions.
Liquidity Buffer Remains Robust
Current ratio stood at 4.96 in Q2 2026, down from 5.16 in Q1 2026 but still strong, per the latest balance sheet, with cash at $479.4M, providing ample coverage for short-term obligations.
The current ratio of 4.96 in Q2 2026, while lower than the 9.25 in Q2 2024, remains well above the 2.0 threshold typically considered healthy, indicating a strong liquidity position. The quick ratio of 4.38 suggests that even without inventory, the company can cover current liabilities nearly 4.4 times, reflecting minimal reliance on inventory for liquidity. This buffer is particularly important given the cyclicality of hardware sales and potential supply chain disruptions, as noted in the business cycle sensitivity analysis. The cash position of $479.4M, combined with minimal debt, suggests that Alarm.com could withstand a severe demand shock without liquidity constraints.
Misapplied Metric: P/E on GAAP Earnings
The P/E ratio of 22.59 on TTM GAAP earnings, per the latest valuation data, understates the company's true earning power because stock-based compensation of $15.6M in Q2 2026, as disclosed in the income statement, reduces reported net income.
Investors commonly use P/E to value Alarm.com, but GAAP earnings are significantly depressed by stock-based compensation, which is a non-cash expense. In Q2 2026, SBC of $15.6M, as reported in the income statement, reduced net income, making the P/E appear higher than the economic reality. A more appropriate metric is P/FCF, which at 20.06, as shown in the valuation multiples, reflects the company's cash generation more accurately. Additionally, EV/EBITDA of 16.04, which excludes depreciation and amortization, provides a cleaner comparison to peers, as it is less distorted by non-cash charges. Investors should focus on cash-based multiples to assess Alarm.com's valuation relative to its ability to generate shareholder value.