ALRM Should I Buy
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Alarm.com Holdings Inc (ALRM) is not a strong buy at this moment for a beginner investor with a long-term strategy and $50,000-$100,000 to invest. While the company has shown positive financial growth in Q4 2025 and hedge funds are increasing their positions, insider selling, bearish moving averages, and mixed analyst ratings suggest caution. Additionally, no strong proprietary trading signals are present to support an immediate buy decision.
The MACD is positive and expanding, indicating bullish momentum. However, the RSI is neutral at 71.153, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading near its resistance level (R1: 48.112), suggesting limited upside potential in the short term.
Hedge funds are significantly increasing their positions, with a 571.25% increase in buying over the last quarter. The company reported strong Q4 2025 financial results, including an 8.02% YoY revenue growth and a 17.86% YoY EPS increase. SaaS and license revenue grew by 9.2% YoY for 2025, exceeding $1 billion in annual revenue.
Insiders are selling heavily, with a 3427.23% increase in selling activity over the last month. Analyst sentiment is mixed, with recent price target reductions from Barclays and JPMorgan citing sector challenges. The bearish moving averages and lack of strong trading signals further dampen the stock's short-term outlook.
In Q4 2025, Alarm.com reported an 8.02% YoY increase in revenue to $261.7 million, a 14.53% YoY increase in net income to $34.7 million, and a 17.86% YoY increase in EPS to $0.66. Gross margin improved slightly to 62.74%, up 0.29% YoY.
Barclays lowered its price target to $50 from $56 and maintained an Equal Weight rating. JPMorgan reduced its price target to $40 from $55 and maintained an Underweight rating, citing concerns about the competitive landscape in the software sector.
