Alarm.com

Alarm.com runs the cloud-based SaaS platform behind a residential and commercial security ecosystem of roughly 9,500 dealer partners and 9 million end subscribers across the US and select international markets. Unlike ADT or Ring, Alarm.com does not own the customer relationship and does not install hardware — it sells the recurring monthly software platform (RMR) that lets independent dealers compete with the in-house tech of Vivint, ADT and SimpliSafe. The dealer channel is the moat: an Alarm.com dealer earns a higher RMR margin than they could with first-party tech because the back-end is amortised across the entire dealer base.

The thesis has been mispriced for three reasons. First, the spin-out from Build-A-Brand owner Monitronics in 2015 made ALRM look like a security company rather than a SaaS company, so the multiple anchored to ADT (4-6× EBITDA) rather than to vertical SaaS (15-22× EBITDA). Second, Ring (Amazon, 2018) and Google Nest were assumed to disrupt the category. Third, Alarm.com guided cautiously through 2022-2023 as new-home-construction-tied dealer adds slowed. By Q1/2026 the picture is different: SaaS revenue grew 9% YoY to 165 M USD, EBITDA margin sat at 27% (up from 23% in 2023), and Build-Computer-Vision-monetisation has finally crossed from R&D into commercial inflection with the Smarter Surveillance commercial AI suite.

Alarm.com is the textbook quiet-quality compounder that long-term SaaS investors own without much fanfare. Brown Capital Management (small-cap growth, Baltimore) holds 6.8%, Wasatch holds 5.9%, and Conestoga Capital holds 4.4% — the trio combined for 17% of outstanding by mid-2025 and stayed put through Q1/2026. New buying came from Capital Group (4.1% at YE/2025) and FMR (Fidelity 3.4%). Founder CEO Stephen Trundle (in role since the spin-out) has not sold a share since June 2024 — a notable stretch for a founder-CEO with founder-loaded comp. Short interest stayed below 5% of float throughout 2025, indicating the bear case is intellectual (multiple compression) rather than thesis-breaking.

At 65 USD per share, market cap is 3.4 B USD and EV is 2.85 B USD after net cash. On FY/2026 consensus revenue of 945 M USD and EBITDA of 195 M USD, EV/Sales is 3.0× and EV/EBITDA is 14.6×. The vertical-SaaS comp set (Procore, Veeva, Toast) trades 22-30× EBITDA at similar growth-and-margin profiles. The market is treating Alarm.com as a 60% vertical SaaS, 40% security hardware — and as the AI/commercial mix-shift continues, the multiple should re-rate toward 17-19× FY/2027 EBITDA, which produces 76-85 USD per share fair value vs the current 65 USD level. The pushback is execution on commercial AI — without it the stock stays in the high-50s/low-60s for two more years.

1. August 7, 2026: Q2/2026 earnings — first read on whether commercial site additions can sustain the +14,000-per-quarter run-rate that drives the FY/2026 thesis.
2. November 5, 2026: Q3/2026 earnings plus annual ISC East commercial security trade show — typically Alarm.com unveils the next year roadmap and AI features.
3. Q1/2027 (open): Smart-home insurance integration milestone — State Farm and Travelers piloted dealer-RMR-linked insurance discounts in 2025. National roll-out in 2026 would meaningfully tighten the moat versus Ring/Nest.

Alarm.com is one of the most under-the-radar mid-cap SaaS compounders in the US public market. The dealer channel is a moat that gets stronger every year, commercial AI is genuinely accelerating, and the founder is still running the company with no share sales. The pushback is fair on valuation — the easy multiple-rerate is mostly done. From here you need the commercial mix-shift to actually accelerate revenue growth, which means the next four quarters of commercial-site-add data are the watch-list. I treat ALRM as a 2-3% quality-SaaS position and would add aggressively on any selloff below 55 USD.