Alarm.com (ALRM) Q4 Earnings Report Preview: What To Look For

Adam Hejl /
2024/02/21 2:02 am EST

Home security and automation software provider Alarm.com (NASDAQ:ALRM) will be reporting results tomorrow after the bell. Here's what to look for.

Last quarter Alarm.com reported revenues of $221.9 million, up 2.6% year on year, missing analyst expectations by 0.7%. Although its revenue missed analysts' expectations this quarter, Alarm.com beat analysts' gross margin, adjusted EBITDA, and EPS estimates. Its stronger profitability was driven by better-than-expected results in its SaaS and license segment, which is its highest-margin revenue stream.

Is Alarm.com buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Alarm.com's revenue to grow 8.1% year on year to $224.9 million, improving on the 6.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.47 per share.

Alarm.com Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 3.6%.

Looking at Alarm.com's peers in the software as a service segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. Manhattan Associates delivered top-line growth of 20.3% year on year, beating analyst estimates by 6.4% and ServiceNow reported revenues up 25.6% year on year, exceeding estimates by 1.5%. Manhattan Associates traded up 4.1% on the results, ServiceNow was up 1.1%.

Read our full analysis of Manhattan Associates's results here and ServiceNow's results here.

Investors in the software as a service segment have had steady hands going into the earnings, with the stocks down on average 0.3% over the last month. Alarm.com is up 9.5% during the same time, and is heading into the earnings with analyst price target of $68.6, compared to share price of $68.9.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefitting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.