ALRM - Alarm.com's Stock Has Held Up Well During the Coronavirus Pandemic
The COVID-19 pandemic has created a bifurcation in the stock market between companies that have suffered from the stay-at-home order (travel, retail, restaurants, etc.) and companies that have not been greatly affected or have benefited from it (e-commerce and essential services). Home security and automation company Alarm.com (NASDAQ: ALRM) appears to fall into the category of businesses that are not greatly affected. This has been reflected in its stock's positive year-to-date price performance. Should investors expect Alarm.com's stock to continue rising?
Alarm.com sells software and hardware for connecting residential and commercial properties to the internet. The largest use case of the company's service is home security. The proliferation of smart devices in homes (part of the Internet of Things) has led to more applications of the technology as well. Property owners can use the company's software to lock the front door, close the garage door, lower the air conditioning temperature, or monitor the home with video surveillance.
The addressable market for home automation is quite large with plenty of untapped potential. Of the 144 million homes in the U.S. and Canada, 24 million already use professionally monitored security systems, according to data the company presented. Alarm.com currently has 6.8 million homes on its platform, giving it a leading market share position.