ALRM
Alarm.com Holdings, Inc.
$52.20
Platform & Compounding FCF
70%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 14.3% above fair value
You pay
$52.20
Bear
$33.92
Fair
$45.67
Bull
$56.96
Bear
$33.92
-35.0%
6% stage 1 growth, 11% discount
Fair
$45.67
-12.5%
9% stage 1 growth, 11% discount
Bull
$56.96
+9.1%
12% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
24.5x
Market is pricing in (growth)
11.7%
vs 9.2% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $55.00 from 19 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $45.67 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions