Shares of AlarmCom Hldg Inc ALRM have surged almost 50 percent year-to-date. Imperial Capital’s Jeff Kessler downgraded the rating for the company from Outperform to In-line, while maintaining a price target of $24.50. The analyst commented that the shares have surpassed the price target and reached a new 52-week high.
Analyst Jeff Kessler mentioned that Alarm.com continues to possess:
- A “wide competitive moat”
- Benefits from macro-factors that are driving the home automation market
- Technology advantages, such as its 4G LTE capability with Verizon
- Robust international growth of its competitors
- Potential in mobile healthcare and other businesses over the next couple of years
- Industry-leading customer service and dealer training
“Nonetheless, the shares have risen to a level of fair valuation, in our view,” Kessler wrote. He added that the price target is now 2 percent below the current price.
End User Subscription Growth
Kessler highlighted that Alarm.com’s priorities in end user subscription growth, which has decelerated to low teens from mid-teens a year ago, is mainly due to:
- The company’s focus on getting more profitable upgraded from its existing customers, which contributed the majority of revenue growth
- The relatively slow growth of its largest client, Monitronics
- “The potential boost from its new burgeoning international business, which is beginning to reach critical mass”
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.