Recent News
On August 7, 2025 Arlo reported Q2 2025 results showing total revenue of $129.4M and ARR of $316M, up 34% year-over-year, with subscriptions and services revenue of $78M, up 30% YoY. Management cited Arlo Secure 6 and an ADT strategic partnership as growth drivers and announced product refreshes for the holiday lineup.
Technical Analysis
Directional indicators show an emerging trend: ADX sits at 20.52, signaling trend strength moving from flat toward directional. DI+ equals 29.13 and trends higher while DI- equals 16.54 and trends lower, a configuration that supports bullish directional momentum and aligns with recent subscription-driven positive sentiment.
MACD stands at 0.44 and trends higher with a signal line at 0.28; MACD has crossed above its signal line, indicating bullish momentum that supports a near-term upward bias in price action.
MRO reads 28.19 with a peak-and-reversal pattern, which implies price currently sits above model target and faces pressure to mean-revert; this introduces downside risk that could interrupt short, sharp advances even as momentum indicators remain constructive.
RSI at 56.08 and rising indicates moderate upside momentum without overbought conditions, supporting continued room for gains before encountering significant exhaustion signals.
Price sits above multiple averages: close $18.93 exceeds the 20-day average $18.37, 50-day $17.73 and 200-day $14.34, reinforcing upward bias from moving-average structure. Ichimoku tenor shows price above the cloud; Tenkan-Sen $18.36 and Kijun-Sen $18.21 sit just below current price, which supports short-term bullish placement versus the cloud baseline.
Bollinger positioning places the close near the upper 1x band ($19.24), suggesting that intraday extension sits close to a typical volatility envelope. Volume at 751,626 trails 10/50/200-day averages, implying lower conviction behind the latest move and increasing vulnerability to reversals on heavier selling.
Volatility and beta metrics show above-market sensitivity: 42-day beta 1.59 and 52-week beta 1.46 indicate greater-than-market swings, which raises both opportunity and risk for short-term directional trades over the coming weeks.
Fundamental Analysis
Revenue dynamics show modest expansion: YoY revenue growth measures 2.322% while quarter-over-quarter revenue contracted about -5.213%, reflecting seasonality and product-refresh timing tied to the holiday cadence announced by management. Total revenue for the period stands at $129.4M.
Profitability centers on a healthy gross margin of 44.878%, slightly below the industry peer mean of 45.46%, with gross margin improving year-over-year. Operating and EBIT margins sit at 1.494%; that margin trails the industry peer mean of 28.624%, indicating limited operating leverage relative to typical peers despite improving service economics.
Subscriptions and services clearly alter the unit economics: ARR increased to $316M per recent disclosures, and subscription-led service margins recorded record levels in company releases, which supports higher recurring revenue contribution to top-line stability even as product gross margins compress during refresh cycles.
Cash flow and liquidity show constructive buffers. Cash and short-term investments total $160.4M with cash and equivalents of $71.244M; free cash flow registered $5.855M with a free cash flow yield of roughly 0.37%. Free cash to net income equals about 187%, indicating cash generation exceeded net income in the period reported. Current liquidity ratios remain adequate: current ratio 1.47 and quick ratio 1.30.
Capital structure remains light: total debt $16.6M produces a debt-to-assets ratio near 5.19% and debt-to-equity about 14.04%, reflecting minimal financial leverage. Interest coverage stands exceptionally high at 193.3x, underscoring low interest burden versus operating earnings.
Per-share metrics show GAAP EPS actual $0.17 versus estimate $0.15, an EPS beat of $0.02 or roughly a 13.33% surprise. Forward-looking multiples compress versus current trailing extremes: trailing P/E reads about 509.9 while forward P/E stands near 104.97; price-to-book equals 13.47 and price-to-sales near 12.31—levels that drive the WMDST valuation conclusion.
WMDST values the stock as over-valued given current market capitalization relative to earnings power and cash returns, despite improving subscription margins and ARR acceleration. The subscription margin tailwind improves fundamental trajectory but fails to offset elevated market multiples at present.
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 | $ 0.15 | |
| EPS Actual | $ 0.17 | |
| EPS Difference | $ 0.02 | |
| EPS Surprise | 13.333 % | |
| 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 % |
|