#7 - Alarm.com (NASDAQ:ALRM)
The last stock on our list is perhaps the stock that illustrates the benefits of the IoT sector the best. Alarm.com (NASDAQ:ALRM) is seeking to become the leader in home security solutions. The company currently sells devices such as security cameras and locks. And it also provides the cloud software that connects them. And since users can engage with all of this through their smartphone, the company creates a complete closed-loop home security system.
And what investors love about Alarm.com’s business model is that it is a software-as-a-service (SaaS) company. That means it generates consistent and increasing revenue from subscriptions. The company is forecasting an annual growth rate in the sector of at least 24%. That should drive up the number of subscriptions. And as subscriptions rise so will the company’s cash position that is already allowing it to expand and invest in other technologies.
ALRM stock is up 86% in the last 12 months. However, the stock is down nearly 14% year-to-date which could create a great buying opportunity.
About Alarm.com
Alarm.com Holdings, Inc provides various Internet of Things (IoT) and solutions for residential, multi-family, small business, and enterprise commercial markets in North America and internationally. The company operates through two segments, Alarm.com and Other. It offers solutions to control and monitor security systems, as well as to IoT devices, including door locks, garage doors, thermostats, and video cameras; and video monitoring and analytics solutions, such as video analytics, escalated events, video doorbells, intelligent integration, live streaming, secure cloud storage, and video alerts.
Read More - Current Price
- $62.32
- Consensus Rating
- Hold
- Ratings Breakdown
- 2 Buy Ratings, 3 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $64.40 (3.3% Upside)
As you can see, IoT stocks cover a range of sectors and have many applications. “Connection” covers a lot of territories.
If I wanted to look at this from a contrarian angle, I might think that the world will be looking for more human interaction after the pandemic ends. I think that may very well be true, but it will still be facilitated by technology. And some ripple effects, such as the need for retailers to have an omnichannel selling model will stick around. Plus, the smart homes many individuals live in will sooner than we imagine turn into smart cities.
So I can’t get on board with IoT stocks being a post-pandemic loser. In fact, these stocks are likely to continue to gain steam as we look for ways to make our lives safer, more secure, and more streamlined. Investing in any of the stocks in this presentation would be a good place to start.
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