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Investing.com - Goldman Sachs reduced its price target on Alarm.com (NASDAQ:ALRM) to $56.00 from $63.00 while maintaining a Neutral rating on the security monitoring company’s stock. The new target still suggests potential upside from the current price of $50.18, with InvestingPro data indicating the stock is currently undervalued based on Fair Value assessments. Notably, ALRM’s RSI suggests the stock is in oversold territory.
The firm’s decision follows Alarm.com’s third-quarter 2025 results, which exceeded consensus expectations in both SaaS and hardware revenue segments. The company subsequently raised its full-year guidance for SaaS and license revenue by approximately $4.1 million. This comes as Alarm.com approaches the $1 billion revenue milestone, having reported $991.77 million in revenue for the last twelve months with a 7.35% growth rate.
Goldman Sachs noted that while Alarm.com’s growth initiatives continue to expand at approximately 20-25% year-over-year and now represent about 30% of SaaS and license revenue, the magnitude of the quarterly beat was attributed to partial pull-forward of EnergyHub revenue.
The research firm acknowledged Alarm.com’s encouraging annual run-rate of $1 billion in revenue and improving free cash flow. The preliminary outlook for fiscal year 2026 implies mid-single digit growth in the SaaS and license business.
Goldman Sachs remains cautious, awaiting proof points of sustained growth improvement and increased visibility regarding macroeconomic uncertainty’s impact on the hardware business into 2026 before taking a more positive stance on the shares. Despite these concerns, InvestingPro identifies additional factors investors should consider, with several more ProTips available through the comprehensive Pro Research Report, which provides deep-dive analysis on Alarm.com and 1,400+ other US equities.
In other recent news, Alarm.com Holdings Inc. reported its third-quarter 2025 earnings, which exceeded analysts’ expectations. The company achieved a significant increase in both earnings per share (EPS) and revenue. Despite this positive earnings surprise, the company’s stock experienced a decline in aftermarket trading. These developments are part of the latest updates concerning Alarm.com. The earnings results highlight the company’s financial performance during this period. Investors may find it noteworthy that the stock movement did not align with the earnings outcome. This discrepancy between earnings results and stock performance is a recent occurrence.
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