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Alarm.com Holdings earnings quality score

How much of the reported profit is backed by cash, and how many markers of managed earnings the filings show

Score55 / 100 · grade C · rank 811 of 1027

Alarm.com Holdings (ALRM) scores 55 of 100 for earnings quality, grade C: rank 811 of 1027 companies and 165 of 203 in technology. It loses the most points on accruals of -1.0% of assets, higher than 79% of companies, Montier C-score 4 of 6 checks failed, discretionary accruals of +4.8% of assets (modified Jones), larger than most. It earns full or near-full marks for Beneish M-score -2.98: clean (below −2.22), Dechow F-score 0.34 (normal).

What earned and lost points

ComponentWhat the filings showPointsOf
Accrualsaccruals of -1.0% of assets, higher than 79% of companies522
Beneish M-scoreBeneish M-score -2.98: clean (below −2.22)1717
Dechow F-scoreDechow F-score 0.34 (normal)1717
Montier C-scoreMontier C-score 4 of 6 checks failed617
Discretionary accrualsdiscretionary accruals of +4.8% of assets (modified Jones), larger than most411
Piotroski F-scorePiotroski F-score 5 of 9611
Earnings smoothnessprofit far steadier than cash flow (smoothness 0.30)16
ALRM: share of the available points, by componentALRM: share of the available points, by componentAccruals21%Discretionary accruals34%Beneish M-score100%Dechow F-score100%Montier C-score34%Piotroski F-score56%Earnings smoothness21%

How the score is built

Eight published measures, each scored against the whole universe or on its own scale and weighted: accruals 20, discretionary accruals 10, Beneish M 15, Dechow F 15, Montier C 15, Piotroski F 10, the non-GAAP gap 10, smoothness 5. A measure that cannot be computed (Beneish for a bank, say) drops out and the rest is rescaled, so every company is scored on what applies to it.

Every company ranked → The full quality workbench, live → Alarm.com Holdings: cash flow →

Computed from the companies’ own XBRL filings (latest fiscal year) by published formulas; a statistical screen, not an audit or an accusation. A low score means the reported profit shows more of the markers of managed or low-quality earnings than its peers. Not investment advice.