tiprankstipranks
Ratings

Balanced Outlook with Cautious Hold Rating Amid Acquisition and Market Challenges for Alarm

Balanced Outlook with Cautious Hold Rating Amid Acquisition and Market Challenges for Alarm

William Blair analyst Stephen Sheldon has maintained their neutral stance on ALRM stock, giving a Hold rating on February 18.

Discover the Best Stocks and Maximize Your Portfolio:

Stephen Sheldon’s rating is based on several factors that indicate a balanced outlook for Alarm’s stock. Although the company reported stronger-than-expected fourth-quarter results with revenue and adjusted EBITDA surpassing estimates, the growth was partially driven by the acquisition of a small business, CHeKT. This acquisition slightly boosted revenue guidance but also introduced potential challenges that might impact future profitability.
Moreover, while the SaaS/license revenue showed promising acceleration, Alarm faces certain headwinds that could impact its future growth trajectory. These include a transition of a key partner, ADT, to Google, and the closing of litigation that had previously enhanced IP license revenue. Such factors contribute to a cautious outlook, justifying Stephen Sheldon’s decision to maintain a Hold rating on Alarm’s stock.

In another report released on February 18, Barclays also maintained a Hold rating on the stock with a $67.00 price target.

1