Yahoo Finance Investors in Alarm.com Holdings (NASDAQ:ALRM) have seen favorable returns of 34% over the past year
It might be of some concern to shareholders to see the Alarm.com Holdings, Inc. (NASDAQ:ALRM) share price down 12% in the last month. But that doesn't change the reality that over twelve months the stock has done really well. In that time we've seen the stock easily surpass the market return, with a gain of 34%.
Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.
View our latest analysis for Alarm.com Holdings
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Alarm.com Holdings was able to grow EPS by 44% in the last twelve months. It's fair to say that the share price gain of 34% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about Alarm.com Holdings as it was before. This could be an opportunity.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Dive deeper into the earnings by checking this interactive graph of Alarm.com Holdings' earnings, revenue and cash flow.
A Different Perspective
It's good to see that Alarm.com Holdings has rewarded shareholders with a total shareholder return of 34% in the last twelve months. Notably the five-year annualised TSR loss of 1.8% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand Alarm.com Holdings better, we need to consider many other factors. Even so, be aware that Alarm.com Holdings is showing 1 warning sign in our investment analysis , you should know about...
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
