ALARMS earnings have grown 50% per year over the past 5 years!

PROs:

Currently trading at 14% below its fair value
Revenue is expected to grow 9% per year
Earnings grew by 150% over the past year
ALRM is good value based on its PE Ratio
ALRM’s revenue is forecast to grow faster than the US market per year
ALRM’s net profit margins (11%) are higher than last year (5%)
ALRM’s earnings have grown by 50% per year over the past 5 years
Short term assets exceed its short and long term liabilities
ALRM’s debt is covered by its cash flow
Over the past 4 quarters, ALRM has beaten consensus EPS 4 times
Analysts (overall) are optimistic about ALRM



CON’s:

Forecasters expect earnings to decline by -14% per year
ALRM underperformed the US software industry and US market over the past year
ALRM is poor value based on its PE Ratio
ALRM is overvalued based on its PB Ratio compared to the US software industry average
ALRM’s revenue is forecast to grow slower than 20% per year
ALRM does not pay a dividend
ALRM insiders have only sold shares in the past 3 months

Report:

Definitely a good company to consider, ALRM is outperforming its rivals Comcast, Honeywell International, Raytheon Technologies. With good earnings release yesterday, we can expect this company to continue heading north for the medium term at least. Fundamental data is satisfactory, with a good track record and flawless balance sheets.

Bottomcatcher’s Opinion: Two ways you can work with this, for a short term hold, a long position could be taken at current levels (48.00) with a target at mid 53s (1). My preferred set-up would be to wait for a break, hold and close on the daily time frame above the 5370 level (1) and enter a long there, focusing on testing the ‘lower’ channel resistance line (A) as a first target. Back inside the channel would be considered very bullish. Below the 40.00 handle negates this idea.