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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Alarm.Com Holdings, Inc. (XNAS:ALRM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ALRM
Name:
ALARM.COM HOLDINGS, INC. (XNAS:ALRM)
Sector:
- 16132.00K
Industry:
Software�Application
CEO:
Mr. Stephen Trundle
Total Employees:
1,500
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -90.44% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ALARM.COM HOLDINGS, INC.(ALRM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�APPLICATION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
66.31
One Month Price Target:
$66.75
Six Month Price Target :
$68.97
Likely Price in One Year's Time:
Ticker:
$71.63
Likely Trading Range Today Under (Normal Volatility)
$66.07
Price Upper limit ($) :
$66.69
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$62.66
This week:
$58.15
This month :
$49.99
Other Primary facts
Market Cap:
3.41B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
49.74M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.72%
-16.79%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$83.23
$75.38
$49.39
$57.24
Medium risk (<10%) entry points
Buy Call
Sell Call
$72.83
Buy Put:
Sell Put:
$71.15
$59.77
$61.47
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ALRM
Sharpe Ratio:
3.54%
Comparison:
ALRM, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 267.76% higher than the industry
& ratio is 55.52% higher than the market/S&P 500 average
Average Returns/Yield of
ALRM
Daily returns:
0.11%
Weekly returns:
0.53%
Monthly returns:
2.11%
Yearly returns:
9.94%
Comparison of returns:
Average annual returns/yield (last 3 years) is 155.20% above industry average
Classification:
ALRM, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.06
Statistical test of Returns:
ALRM has yielded a higher return than the market, the results are statistically significant
Volatility (measured by Standard Deviation)
Daily Volatility:
2.73%
Weekly Volatility:
6.11%
Monthly Volatility:
12.21%
Yearly Volatility:
42.31%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.68%
Volatility in last five trading days has been -75.18% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.50%
Weekly VaR:
-12.31%
Monthly VaR:
-24.61%
How Much Can the price of
ALRM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-85.26%
This translates to price declining to:
$52.68
This translates to price declining to:
$9.77
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
ALRM is a 73.71% riskier investment compared to the market/S&P 500 & is 48.82% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -24.02% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ALRM
Beta in relation to market/S&P 500--1.19
Expected beta in 1 year's time:
0.741
Expected beta in 3 year's time:
1.048
Unlevered (debt free) Beta:
0.602
Beta in relation to Nasdaq (XNAS):
0.909
Beta in relation to all global stocks::
0.57
Beta Comparison & Analysis
Beta of competitors/peers::
1.108
Beta is 7.79% higher than peers
Average Industry Beta:
1.335
Beta is -10.54% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
10.81%
Sustainable growth rate is -65.26% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.140
Alpha is -694.03% below industry average alpha yield
Alpha is 893% higher than market/& is unsustainably high
Analysis of Cost of Capital of
ALRM
Equity cost of capital:
0.113
Equity cost of capital is -7.84% below industry mean WACC
Unlevered (without debt) cost of capital:
5.71%
Before-tax cost of debt:
2.52%
After-tax cost of debt:
1.99%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.99%
WACC is -19.45% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$15.72
Revenue growth rate per share of (3Y):
5.7
Annual revenue growth rate is -39.31% below industry average
EPS:
$0.89
Expected Annual growth rate of EPS (3Y):
-3.10%
Expected future EPS growth rate is -111.33% lower than the Software�Application industry
Free cash flow (FCF) per share:
$1.08
-
-
Debt per share
$10.45
EBITDA per share
$1.78
Valuation Analysis Today of
ALRM
P/E Ratio:
82.94
P/E Ratio of Competitors/Peers:
73.99
P/E ratio is 12.10% higher than main peers & is -53.30% lower than the industry
Stock price/value with industry average P/E ratio: $158.06
ALRM is -58.05% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
4.22
Price to sales ratio is -63.23% below the industry mean
P/B (Price to book value ratio):
5.7
Price to free cash flow: 61.67
-
Net income growth rate (3Y):
136.26%
Net income growth rate is -44.19% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
92.33%
Net debt to equity ratio:
-25.14%
Debt to assets ratio:
42.44%
Net debt to assets ratio:
-11.55%
Debt-to-asset ratio is -22.65% below industry average
Ability to repay debt:
Interest coverage ratio:
6.62
Interest coverage ratio is -87.55% less than industry average
Looking forward:
Debt growth rate:
290.31%
Annual debt growth is -69% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.538
Statistical significance of correlation:
ALRM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.503
Stock price is 6.96% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.503
Correlation of price movement with Nasdaq (^IXIC):
-0.052
Covariance of price movement with the market:
-0.083
Kurtosis
5.067
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.037
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
ALRM
Gross Profit Margin Ratio:
231%
Operating Profit Margin Ratio:
7.10%
Operating profit margin is -137.03% lower than the industry
Net Profit Margin Ratio:
231%
Effective Tax Rate:
-6.58%
Effective tax rate is -124.95% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
8.26%
Return on equity (ROE) is -163.16% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.80%
Return on assets (ROA) is -198.87% lower than the industry
Financial Leverage:
1.7x
Current Ratio:
8.27
Current ratio is 176.02% above industry average
Cash Conversion Cycle (days):
73.6
Cash conversion cycle is -22.35% below industry average
The remaining useful life of property plant & equipment is: 0.0 years
Stock based compensation to net income ratio:
26.04%
In-depth Efficiency Analysis
Revenue generated per employee:
521.3K
Each employee generates 51% more revenue than industry average revenue per employee
EBITDA generated per employee:
59.0K
Each employee generates 449% more EBITDA than industry average revenue per employee
Profit generated per employee:
31.0K
Each employee generates -278% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 10.8K
Each employee generates 38% more free cash flow than industry average revenue per employee
Assets/Capital per employee
224.1K
Each employee generates 38% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 16.80%
Growth rate in R&D investment/expenditure is 999.07% higher than the industry
Competitors/Peer firms of
ALRM
Mandiant, Inc. (XNAS:MNDT)
DUOLINGO, INC. (XNAS:DUOL)
CSOD
MATTERPORT, INC. (XNAS:MTTR)
ACI WORLDWIDE, INC. (XNAS:ACIW)
NOVA LTD (XNAS:NVMI)
Sprout Social Inc (XNAS:SPT)
TTEC Holdings, Inc. (XNAS:TTEC)
VIAVI SOLUTIONS INC. (XNAS:VIAV)
Current Analyst Ratings
Strong buy�13%
Buy�17%
Hold�21%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
781.91M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
330.22M
451.68M
186.74M
88.52M
179.38M
90.86M
30.09M
396.20M
573.00K
13.37M
31.40M
88.47M
55.48M
46.51M
42.72M
- 2811.00K
46.51M
Statement of Cash Flow
Date:
Period:
8.11M
Differed Income Tax :
- 10650.00K
Stock Based Compensation :
12.11M
Change in Working Capital :
- 36465.00K
Accounts Receivables:
1.63M
Other Working Capital:
782.00K
Other Non-Cash Items:
4.03M
Net Cash Provided by Operating Activities:
- 13961.00K
Investments in PP&E:
- 2171.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
671.75M
-
671.75M
103.07M
86.44M
27.32M
888.58M
70.10M
112.90M
86.83M
-
39.55M
26.82M
336.21M
-
1.22B
47.70M
10.45M
7.79M
5.84M
43.48M
107.47M
519.79M
9.48M
539.05M
-
646.52M
505.00K
137.88M
-
424.60M
March 31, 2022 at 6:00:00 AM
726.43M
562.99M
1.21B
-
530.24M
- 141511.0K
-
16.00K
- 2155.00K
-
-
- 23331.00K
-
1.08M
- 22251.00K
-
- 38367.00K
672.25M
710.62M
- 13961.00K
- 2171.00K
- 16132.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
ALRM
2023
2024
2025
2026
2027
$78.61
$84.92
$91.73
$99.10
$107.06