Recent News
On August 26, 2025 Arlo introduced an all‑new lineup of AI‑powered Essential, Pro and Ultra cameras and announced preorders and MSRP for multiple models.
Coverage in trade press during September highlighted the new camera series’ AI features—object recognition and fire detection—and reiterated that advanced features require Arlo Secure subscription tiers.
Technical Analysis
ADX at 11.7 indicates no established trend; that lowers conviction for any breakout even though recent momentum appears constructive.
DI+ shows a dip & reversal, a bullish directional signal, while DI‑ is decreasing, which also reads as bullish; together they imply directional momentum recently shifted in favor of buyers.
MACD stands at 0.10 with the MACD line above the 0.02 signal line and the MACD trend increasing, which confirms a bullish momentum crossover and supports near‑term upside bias.
MRO registers 20.62 with a dip & reversal; because MRO sits positive, price currently sits above the model target and faces a likely mean reversion pressure despite recent reversals.
RSI at 53.39 with a dip & reversal shows mild bullish momentum without overbought conditions, aligning with the MACD crossover and supporting a continued consolidation above recent averages.
Price trades above the 12‑ and 26‑day EMAs and above the 20‑ and 50‑day averages (price close $18.06 vs 20‑day avg $17.40 and 50‑day avg $17.45), signaling short‑term strength; the 200‑day average ($14.07) sits well below current levels, reinforcing medium‑term bullish context.
Bollinger bands place the close near the upper band (upper 1σ $17.88, upper 2σ $18.35), which indicates the rally shows modest stretch; the SuperTrend upper band at $18.19 sits just above the close and acts as immediate technical resistance. Volume at 557,555 runs below 10/50/200‑day averages, reducing conviction behind the recent move.
Fundamental Analysis
Revenue totaled $129,405,000 with revenue growth at 8.68% and YoY revenue growth of 2.32%; sequential revenue decelerated QoQ by -5.21%, indicating mixed top‑line momentum that still leans toward expansion over the most recent annual interval.
Gross margin equals 44.88%, up 22.07% YoY, supporting higher service mix and improving unit economics tied to subscriptions and AI features.
EBIT stood at $1,933,000 and the EBIT margin registered 1.49%, down -1.15% YoY and down -2.23% QoQ; that margin sits below the industry peer mean and median, reflecting modest operating leverage relative to peer averages. (Industry peer mean EBIT margin ~28.62%, median ~29.99%.)
Net income $3,124,000 and EPS actual $0.03 missed the $0.04 estimate by $0.01, an EPS surprise of -25%, which compresses headline earnings momentum despite positive cash generation.
Free cash flow totaled $5,855,000 with a free cash flow yield of 0.37%, below the industry peer mean free cash flow yield; cash and short‑term investments combined $160,401,000 provide ample liquidity while free cash flow growth shows recent deterioration (free cash growth QoQ -119.67%).
Leverage stays low: total debt $16,603,000 yields debt‑to‑assets ~5.19% and debt‑to‑equity ~14.04%, well below industry peer averages; interest coverage at 193.3x indicates negligible interest burden and financial flexibility.
Market multiples show elevated valuation metrics: trailing PE ~509.94 and forward PE ~104.97; price‑to‑book ~13.47 sits above the industry peer median while the trailing PE significantly exceeds the industry peer high. WMDST values the stock as over‑valued, a view supported by stretched trailing multiples and muted free cash flow yield despite subscription momentum.
Valuation context: price target mean $20.66 versus close $18.06 implies modest upside in consensus targets, but the WMDST valuation classification signals premium pricing versus fundamentals and peer ranges.
MOST-RECENT QUARTERLY REPORT
| REPORT PERIOD ENDING: | 2025-06-30 |
| REPORT DATE: | 2025-08-07 |
| NEXT REPORT DATE: | 2025-11-05 |
| CASH FLOW | Begin Period Cash Flow | $ 84.0 M |
| Operating Cash Flow | $ 8.8 M | |
| Capital Expenditures | $ -2.98 M | |
| Change In Working Capital | $ -9.03 M | |
| Dividends Paid | — | |
| Cash Flow Delta | $ -12.77 M | |
| End Period Cash Flow | $ 71.2 M | |
| INCOME STATEMENT | REVENUE | |
| Total Revenue | $ 129.4 M | |
| Forward Revenue | $ 143.1 M | |
| COSTS | ||
| Cost Of Revenue | $ 71.3 M | |
| Depreciation | $ 858.0 K | |
| Depreciation and Amortization | $ 858.0 K | |
| Research and Development | $ 18.5 M | |
| Total Operating Expenses | $ 127.5 M | |
| PROFITABILITY | ||
| Gross Profit | $ 58.1 M | |
| EBITDA | $ 2.8 M | |
| EBIT | $ 1.9 M | |
| Operating Income | $ 1.9 M | |
| Interest Income | $ 1.3 M | |
| Interest Expense | — | |
| Net Interest Income | $ 1.3 M | |
| Income Before Tax | $ 2.9 M | |
| Tax Provision | $ -254.00 K | |
| Tax Rate | 21.0 % | |
| Net Income | $ 3.1 M | |
| Net Income From Continuing Operations | $ 3.1 M | |
| EARNINGS | ||
| EPS Estimate | $ 0.04 | |
| EPS Actual | $ 0.03 | |
| EPS Difference | $ -0.01 | |
| EPS Surprise | -25.0 % | |
| Forward EPS | $ 0.13 | |
| BALANCE SHEET | ASSETS | |
| Total Assets | $ 319.7 M | |
| Intangible Assets | $ 11.0 M | |
| Net Tangible Assets | $ 107.2 M | |
| Total Current Assets | $ 268.6 M | |
| Cash and Short-Term Investments | $ 160.4 M | |
| Cash | $ 71.2 M | |
| Net Receivables | $ 61.5 M | |
| Inventory | $ 30.9 M | |
| Long-Term Investments | $ 4.5 M | |
| LIABILITIES | ||
| Accounts Payable | $ 50.2 M | |
| Short-Term Debt | — | |
| Total Current Liabilities | $ 182.3 M | |
| Net Debt | — | |
| Total Debt | $ 16.6 M | |
| Total Liabilities | $ 201.5 M | |
| EQUITY | ||
| Total Equity | $ 118.3 M | |
| Retained Earnings | $ -395.68 M | |
| VALUATION & PER-SHARE METRICS | EQUITY & PER-SHARE METRICS | |
| Book Value Per-Share | $ 1.13 | |
| Shares Outstanding | 104.289 M | |
| Revenue Per-Share | $ 1.24 | |
| VALUATION | Market Capitalization | $ 1.6 B |
| Enterprise Value | $ 1.4 B | |
| Enterprise Multiple | 519.148 | |
| Enterprise Multiple QoQ | -134.65 % | |
| Enterprise Multiple YoY | -605.787 % | |
| Enterprise Multiple IPRWA | ARLO: 519.148 high: 105.485 median: 105.485 mean: 101.877 low: -110.842 |
|
| EV/R | 11.197 | |
| CAPITAL STRUCTURE | ||
| Asset To Equity | 2.703 | |
| Asset To Liability | 1.587 | |
| Debt To Capital | 0.123 | |
| Debt To Assets | 0.052 | |
| Debt To Assets QoQ | -11.714 % | |
| Debt To Assets YoY | 292.221 % | |
| Debt To Assets IPRWA | high: 0.623 mean: 0.307 median: 0.307 ARLO: 0.052 low: 0.013 |
|
| Debt To Equity | 0.14 | |
| Debt To Equity QoQ | -16.807 % | |
| Debt To Equity YoY | 255.753 % | |
| Debt To Equity IPRWA | high: 3.513 median: 1.545 mean: 1.113 ARLO: 0.14 low: -11.026 |
|
| PRICE-BASED VALUATION | ||
| Price To Book (P/B) | 13.467 | |
| Price To Book QoQ | 30.391 % | |
| Price To Book YoY | -2.696 % | |
| Price To Book IPRWA | high: 18.553 ARLO: 13.467 median: 3.782 mean: -5.356 low: -22.718 |
|
| Price To Earnings (P/E) | 509.942 | |
| Price To Earnings QoQ | 640.167 % | |
| Price To Earnings YoY | 264.967 % | |
| Price To Earnings IPRWA | ARLO: 509.942 high: 176.38 median: 132.799 mean: 128.382 low: -8.441 |
|
| PE/G Ratio | -6.374 | |
| Price To Sales (P/S) | 12.308 | |
| Price To Sales QoQ | 37.271 % | |
| Price To Sales YoY | 14.179 % | |
| Price To Sales IPRWA | high: 34.318 median: 34.318 mean: 32.455 ARLO: 12.308 low: 0.373 |
|
| FORWARD MULTIPLES | ||
| Forward P/E | 104.966 | |
| Forward PE/G | -1.312 | |
| Forward P/S | 11.13 | |
| EFFICIENCY | OPERATIONAL | |
| Operating Leverage | -26.858 | |
| ASSET & SALES | ||
| Asset Turnover Ratio | 0.42 | |
| Asset Turnover Ratio QoQ | 4.92 % | |
| Asset Turnover Ratio YoY | -3.529 % | |
| Asset Turnover Ratio IPRWA | high: 0.504 ARLO: 0.42 mean: 0.284 median: 0.284 low: 0.004 |
|
| Receivables Turnover | 2.407 | |
| Receivables Turnover Ratio QoQ | 4.52 % | |
| Receivables Turnover Ratio YoY | 11.678 % | |
| Receivables Turnover Ratio IPRWA | high: 3.503 median: 3.503 mean: 3.416 ARLO: 2.407 low: 1.161 |
|
| Inventory Turnover | 2.18 | |
| Inventory Turnover Ratio QoQ | 23.555 % | |
| Inventory Turnover Ratio YoY | 21.6 % | |
| Inventory Turnover Ratio IPRWA | high: 2.61 ARLO: 2.18 mean: 1.748 median: 1.333 low: 0.59 |
|
| Days Sales Outstanding (DSO) | 37.903 | |
| CASH CYCLE | ||
| Cash Conversion Cycle Days (CCC) | 14.529 | |
| Cash Conversion Cycle Days QoQ | -15.109 % | |
| Cash Conversion Cycle Days YoY | 42.124 % | |
| Cash Conversion Cycle Days IPRWA | high: 118.229 ARLO: 14.529 mean: -52.42 low: -57.357 median: -57.357 |
|
| CAPITAL DEPLOYMENT | ||
| Cash Conversion Ratio | 1.499 | |
| CapEx To Revenue | -0.023 | |
| CapEx To Depreciation | -3.467 | |
| CAPITAL, LIQUIDITY & COVERAGE | CAPITAL STRUCTURE | |
| Total Capital | $ 118.3 M | |
| Net Invested Capital | $ 118.3 M | |
| Invested Capital | $ 118.3 M | |
| Net Tangible Assets | $ 107.2 M | |
| Net Working Capital | $ 86.3 M | |
| LIQUIDITY | ||
| Cash Ratio | 0.88 | |
| Current Ratio | 1.474 | |
| Current Ratio QoQ | 3.704 % | |
| Current Ratio YoY | -0.568 % | |
| Current Ratio IPRWA | high: 5.246 ARLO: 1.474 mean: 0.92 median: 0.868 low: 0.733 |
|
| Quick Ratio | 1.304 | |
| Quick Ratio QoQ | 6.76 % | |
| Quick Ratio YoY | 6.26 % | |
| Quick Ratio IPRWA | high: 3.25 ARLO: 1.304 mean: 0.85 median: 0.826 low: 0.425 |
|
| COVERAGE & LEVERAGE | ||
| Debt To EBITDA | 5.949 | |
| Cost Of Debt | 0.046 % | |
| Interest Coverage Ratio | 193.3 | |
| Interest Coverage Ratio QoQ | -233.218 % | |
| Interest Coverage Ratio YoY | -115.1 % | |
| Interest Coverage Ratio IPRWA | high: 418.815 ARLO: 193.3 mean: 6.735 median: 4.624 low: -88.91 |
|
| Operating Cash Flow Ratio | -0.037 | |
| TIMING / LIQUIDITY | ||
| Days Payables Outstanding (DPO) | 68.378 | |
| DIVIDENDS | ||
| Dividend Coverage Ratio | — | |
| Dividend Payout Ratio | — | |
| Dividend Rate | — | |
| Dividend Yield | — | |
| PERFORMANCE | GROWTH | |
| Asset Growth Rate | 7.813 % | |
| Revenue Growth | 8.683 % | |
| Revenue Growth QoQ | -521.3 % | |
| Revenue Growth YoY | 232.173 % | |
| Revenue Growth IPRWA | high: 25.153 % ARLO: 8.683 % mean: -0.87 % median: -1.387 % low: -11.52 % |
|
| Earnings Growth | -80.0 % | |
| Earnings Growth QoQ | -260.0 % | |
| Earnings Growth YoY | -820.007 % | |
| Earnings Growth IPRWA | high: 36.316 % mean: -4.699 % median: -4.848 % low: -42.164 % ARLO: -80.0 % |
|
| MARGINS | ||
| Gross Margin | 44.878 % | |
| Gross Margin QoQ | 1.341 % | |
| Gross Margin YoY | 22.071 % | |
| Gross Margin IPRWA | high: 68.88 % median: 46.491 % mean: 45.46 % ARLO: 44.878 % low: 7.001 % |
|
| EBIT Margin | 1.494 % | |
| EBIT Margin QoQ | -222.559 % | |
| EBIT Margin YoY | -114.875 % | |
| EBIT Margin IPRWA | high: 29.991 % median: 29.991 % mean: 28.624 % ARLO: 1.494 % low: -3.422 % |
|
| Return On Sales (ROS) | 1.494 % | |
| Return On Sales QoQ | -222.559 % | |
| Return On Sales YoY | -114.875 % | |
| Return On Sales IPRWA | high: 29.991 % median: 29.991 % mean: 28.696 % ARLO: 1.494 % low: 0.294 % |
|
| CASH FLOW | ||
| Free Cash Flow (FCF) | $ 5.9 M | |
| Free Cash Flow Yield | 0.368 % | |
| Free Cash Flow Yield QoQ | -86.029 % | |
| Free Cash Flow Yield YoY | -18.04 % | |
| Free Cash Flow Yield IPRWA | high: 5.469 % mean: 0.861 % median: 0.756 % ARLO: 0.368 % low: -5.107 % |
|
| Free Cash Growth | -79.176 % | |
| Free Cash Growth QoQ | -119.674 % | |
| Free Cash Growth YoY | 15.936 % | |
| Free Cash Growth IPRWA | high: 96.759 % median: 16.877 % mean: 15.628 % ARLO: -79.176 % low: -301.389 % |
|
| Free Cash To Net Income | 1.874 | |
| Cash Flow Margin | -5.253 % | |
| Cash Flow To Earnings | -2.176 | |
| VALUE & RETURNS | ||
| Economic Value Added | $ 0.04 | |
| Return On Assets (ROA) | 1.014 % | |
| Return On Assets QoQ | -460.854 % | |
| Return On Assets YoY | -125.684 % | |
| Return On Assets IPRWA | high: 7.072 % median: 7.072 % mean: 6.71 % ARLO: 1.014 % low: -8.755 % |
|
| Return On Capital Employed (ROCE) | 1.406 % | |
| Return On Equity (ROE) | 0.026 | |
| Return On Equity QoQ | -426.856 % | |
| Return On Equity YoY | -122.679 % | |
| Return On Equity IPRWA | high: 0.356 median: 0.356 mean: 0.328 ARLO: 0.026 low: -0.353 |
|
| DuPont ROE | 2.819 % | |
| Return On Invested Capital (ROIC) | 1.291 % | |
| Return On Invested Capital QoQ | -216.411 % | |
| Return On Invested Capital YoY | -82.117 % | |
| Return On Invested Capital IPRWA | high: 14.073 % median: 14.073 % mean: 13.475 % ARLO: 1.291 % low: -0.698 % |
|