Value
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.4 |
| P/S | 8.2 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 6.0 |
| PEG | 9.4 |
| Analyst target | 3.0 |
- ▸Forward P/E: 21.4x
- ▸PEG: 0.59
ALRM · Why this verdict
Why Alarm.com Holdings (ALRM) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.9/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Alarm.com has a four-quarter beat streak, steady revenue growth and a perfect 9-of-9 Piotroski score, but the price is above the analyst target and RSI of 85 shows an overbought stock into earnings in four days.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Quarterly revenue has climbed steadily from about $254M to $278M over five quarters. Quality breakdown | Quarterly revenue exceeds $290M within 12 months. | →Stable |
| CounterGrowth of about 2 to 5% per quarter is modest and the Rule of 40 score fails at 19. | ||
EPS beat estimates in each of the last four quarters, with surprises from 7.6% to 24.3%. Earnings | EPS beats at the November 5 report. | ↓Deteriorating |
| CounterBeats against conservative estimates may not translate to stock gains at current levels. | ||
A Piotroski F-Score of 9 of 9 and a current ratio score of 8.0 indicate strong financial health. Quality breakdown | Piotroski score stays at 7 or above. | →Stable |
| CounterReturn and margin scores are mid-range, so health may not convert into profitable growth. | ||
The $64.86 price is above the $56.55 analyst target by about 12.8%, leaving no upside to target. Targets | Analysts raise targets above the price or the price consolidates. | →Stable |
| CounterThe stock is only 3.8% from its high with accumulating volume, and a beat could drive targets higher. | ||
RSI of 85 marks an extremely overbought stock and insiders sold about $3.2M with no buys. Momentum breakdown | RSI falls below 70 without a drop of more than 10%. | ↓Deteriorating |
| CounterInstitutions are accumulating, and selling of 0.10% of market cap is modest. | ||
Quarterly revenue has climbed steadily from about $254M to $278M over five quarters.
→StableQuality breakdown
- Expectation
- Quarterly revenue exceeds $290M within 12 months.
CounterGrowth of about 2 to 5% per quarter is modest and the Rule of 40 score fails at 19.
EPS beat estimates in each of the last four quarters, with surprises from 7.6% to 24.3%.
↓DeterioratingEarnings
- Expectation
- EPS beats at the November 5 report.
CounterBeats against conservative estimates may not translate to stock gains at current levels.
A Piotroski F-Score of 9 of 9 and a current ratio score of 8.0 indicate strong financial health.
→StableQuality breakdown
- Expectation
- Piotroski score stays at 7 or above.
CounterReturn and margin scores are mid-range, so health may not convert into profitable growth.
The $64.86 price is above the $56.55 analyst target by about 12.8%, leaving no upside to target.
→StableTargets
- Expectation
- Analysts raise targets above the price or the price consolidates.
CounterThe stock is only 3.8% from its high with accumulating volume, and a beat could drive targets higher.
RSI of 85 marks an extremely overbought stock and insiders sold about $3.2M with no buys.
↓DeterioratingMomentum breakdown
- Expectation
- RSI falls below 70 without a drop of more than 10%.
CounterInstitutions are accumulating, and selling of 0.10% of market cap is modest.
Per-dimension breakdown
Quality
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.4 |
| ROA | 3.3 |
| Gross margin | 9.2 |
| Op margin | 6.0 |
| Net margin | 5.6 |
| Current ratio | 8.0 |
| FCF quality | 6.2 |
| Moat | 7.0 |
| Rule of 40 | 3.0 |
| Piotroski F | 10.0 |
- ▸Rule of 40: 19 (fail)
- ▸Strong Piotroski F-Score: 9/9
Growth
7.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.8 |
| EPS growth | 9.2 |
Momentum
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.8 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 84)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 6.5 |
| Price target | 4.8 |
- ▸Light analyst coverage (5.0) — signal dampened
Insider
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 7.7 |
| notable moves | 7.0 |
- ▸Modest insider selling — $3,180,878 (0.098% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.7 |
| quality rank | 5.4 |
| growth rank | 3.0 |
Technical
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.9 |
| support resistance | 1.1 |
| 52w position | 9.5 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.2 |
| days to cover | 3.9 |
| volatility | 5.4 |
| put call | 9.0 |
| implied vol | 5.1 |
| max pain risk | 3.0 |
| beta | 8.8 |
| debt equity | 7.3 |
- ▸Above max pain $50
Catalyst
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 2 days
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (4)
- MOMENTUM:6.6>=5.5
- INSIDER:OK
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.9=NEGATIVE
- EARNINGS_PROXIMITY:2d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.94
Upside
-14.1%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.2B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.1 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 7.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.9=NEGATIVE, EARNINGS_PROXIMITY:2d<=7d) reinforce the read. Current asymmetry R:R is -0.94 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 7.0, Catalyst at 7.0, and Momentum at 6.6; the weakest are Technical at 4.2, Peer rank at 4.2, and Insider at 5.3. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.94 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Steady Revenue Growth
Trip ifQuarterly revenue growth falls below 3% YoY.
- P3Strong Financial Health
Trip ifPiotroski F-Score falls below 6 from current 9.
- P4Price Above Analyst Target
Trip ifPrice exceeds the analyst target by more than 25%.
- P5Overbought Insider Selling
Trip ifPrice falls more than 10% below the current $64.86 after earnings.