ALRM
Alarm.com Holdings Inc
Price:  
57.69 
USD
Volume:  
163,540
United States | Software

Alarm.com Fair Value

5.2 %
Upside

What is the fair value of Alarm.com?

As of 2025-07-04, the Fair Value of Alarm.com Holdings Inc (ALRM) is 60.69 USD. This value is based on the Peter Lynch's Fair Value formula. With the current market price of 57.69 USD, the upside of Alarm.com Holdings Inc is 5.2%.

Is Alarm.com a good investment?

With the market price of 57.69 USD and our fair value calculation, Alarm.com Holdings Inc (ALRM) is a good investment. Investing in Alarm.com stocks now will result in a potential gain of 5.2%.

57.69 USD
Stock Price
60.69 USD
Fair Price
FAIR VALUE CALCULATION

Alarm.com Fair Value

Peter Lynch's formula is:

Alarm.com Fair Value
= Earnings Growth Rate x TTM EPS
Alarm.com Fair Value
= 23.5 x 2.58
Alarm.com Fair Value
= 60.69

The earnings growth rate we use in the formula is the average growth rate of net income/earnings over the last 5 years. If the average growth rate is smaller than 5%, we set it to 5%. If it is larger than 25%, we set it to 25%. If the TTM EPS is negative, Peter Lynch Fair Value's result can be unreliable.

Historical Earnings
12-202012-202112-202212-202312-20245Y Avg
Net income77.952.356.381.04124.1278
YoY growth45.6%-32.9%7.6%43.9%53.1%23.5%

Alarm.com Fair Value - Peers Benchmarking

Market Cap (mil)EPS Fair Value Upside
a
Salesforce.Com Inc261,1206.5161.68-40.6%
Intuit Inc217,76012.4174.24-77.7%
Adobe Inc161,66216.1274.25-27.7%
Appfolio Inc8,4855.5136.54-42%
Vertex Inc5,618-0.3-1.4-103.9%
Box Inc4,8161.640.6722.3%
Kinaxis Inc5,6840.311.84-94.1%
Blackline Inc3,6032.562.748.5%
Blackbaud Inc3,190-5.8-29.22-144.4%
Sapiens International Corporation NV1,6821.329.78-1%

Alarm.com Fair Value - Key Data

Market Cap (mil)2,870
P/E22.3x
Forward P/E19.1x
EPS2.58
Avg earnings growth rate23.5%
TTM earnings128

Alarm.com Fair Value - Formula's Origin

Peter Lynch is one of the most legendary investors/fund managers of all time. His philosophy for stock investing is very simple and straightforward: he invests in stocks that are undervalued, meaning its P/E is less than or equal to its earnings growth rate. He believes that if a stock is trading at its fair value, the PEG ratio, which was also invented by him, should be 1.

Therefore, his formula to determine a company's fair value is:

Peter Lynch Fair Value = Earnings Growth Rate * EPS * PEG

PEG is set to 1 so we can ignore it in the calculation. Based on the formula, if the earnings growth rate of a company is 15%, Peter Lynch is willing to buy its share up to P/E = 15.