Alarm.com Holdings Inc (ALRM, Financial), a leading player in the software industry, is currently trading at $60.69 with a market capitalization of $3.02 billion. The company's stock price has seen a gain of 23.32% today and a 14.95% increase over the past four weeks. According to the GF Score, a stock performance ranking system developed by GuruFocus, ALRM has a score of 95 out of 100, indicating the highest outperformance potential. The GF Score is calculated based on five key aspects: Financial Strength, Profitability Rank, Growth Rank, GF Value Rank, and Momentum Rank.
Financial Strength Analysis
ALRM's Financial Strength rank is 7 out of 10. This rank measures the company's financial situation based on its debt burden, debt to revenue ratio, and Altman Z-Score. ALRM's interest coverage is 15.78, indicating a low debt burden. The company's debt to revenue ratio is 0.63, which is relatively low, and its Altman Z score is 3.73, suggesting a low bankruptcy risk.
Profitability Rank Analysis
The company's Profitability Rank is 10 out of 10, indicating high profitability. This rank is based on factors such as operating margin, Piotroski F-Score, trend of the operating margin, consistency of profitability, and Predictability Rank. ALRM's operating margin is 6.02%, and its Piotroski F-Score is 7, suggesting a healthy financial situation. The company has shown consistent profitability over the past 10 years and has a Predictability Rank of 4.5.
Growth Rank Analysis
ALRM's Growth Rank is 10 out of 10, indicating strong growth in terms of revenue and profitability. The company's 5-year revenue growth rate is 18.00%, and its 3-year revenue growth rate is 15.40%. The 5-year EBITDA growth rate is 18.30%, suggesting a consistent increase in the company's business operations.
GF Value Rank Analysis
The company's GF Value Rank is 8 out of 10, indicating that the stock is fairly valued. This rank is determined by the price-to-GF-Value ratio, a proprietary metric calculated based on historical multiples and an adjustment factor based on a company's past returns and growth and future estimates of the business' performance.
Momentum Rank Analysis
ALRM's Momentum Rank is 4 out of 10, indicating moderate momentum. This rank is determined using the standardized momentum ratio and other momentum indicators.
Competitor Analysis
When compared to its competitors, ALRM stands out with its high GF Score. Ncino Inc (NCNO, Financial) has a GF Score of 75, Sprinklr Inc (CXM, Financial) has a GF Score of 19, and Forge Global Holdings Inc (FRGE, Financial) has a GF Score of 20. More details about these competitors can be found here.
Conclusion
In conclusion, Alarm.com Holdings Inc (ALRM, Financial) has an overall GF Score of 95, indicating the highest outperformance potential. With its strong financial strength, high profitability, robust growth, fair valuation, and moderate momentum, ALRM presents a promising investment opportunity. However, potential investors should conduct further research and consider the company's future performance potential based on its GF Score.
