Critical Survey: Alarm.com (NASDAQ:ALRM) & Audioeye (NASDAQ:AEYE)

Audioeye (NASDAQ:AEYE) and Alarm.com (NASDAQ:ALRM) are both technology companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for Audioeye and Alarm.com, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Audioeye	1	1	4	0	2.50
Alarm.com	1	2	0	2	2.60

Audioeye presently has a consensus price target of $14.62, indicating a potential upside of 101.03%. Alarm.com has a consensus price target of $55.00, indicating a potential upside of 3.51%. Given Audioeye’s higher probable upside, research analysts clearly believe Audioeye is more favorable than Alarm.com.

Institutional and Insider Ownership

51.1% of Audioeye shares are held by institutional investors. Comparatively, 91.7% of Alarm.com shares are held by institutional investors. 25.9% of Audioeye shares are held by company insiders. Comparatively, 4.8% of Alarm.com shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Audioeye and Alarm.com’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Audioeye	-10.92%	121.59%	15.45%
Alarm.com	11.11%	15.65%	7.04%

Valuation and Earnings

This table compares Audioeye and Alarm.com”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Audioeye	$41.99 million	2.18	-$3.08 million	($0.36)	-20.21
Alarm.com	$1.01 billion	2.60	$132.57 million	$2.26	23.51

Alarm.com has higher revenue and earnings than Audioeye. Audioeye is trading at a lower price-to-earnings ratio than Alarm.com, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Audioeye has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, Alarm.com has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500.

Summary

Alarm.com beats Audioeye on 9 of the 15 factors compared between the two stocks.

About Audioeye

AudioEye, Inc. provides patented, internet content publication, distribution software, and related services to Internet and other media to people regardless of their device, location, or disabilities in the United States. Its software and services enable conversion of digital content into accessible formats and allows for real time distribution to end users on any Internet connected device. The company offers AudioEye, an always-on testing, remediation, and monitoring solution that improves conformance with web content accessibility guidelines; identifies and fixes the accessibility errors and addresses a range of disabilities, including dyslexia, color blindness, epilepsy, and others; and provides additional solutions to provide for enhanced compliance and accessibility, including periodic auditing, human assisted technological remediations, and legal support services, as well as PDF remediation services, Native Mobile App and audit reports to help customers with their digital accessibility needs. The company serves small- and medium-sized businesses, corporate enterprises, non-profit organizations, and federal government agencies, as well as federal, state, and local governments and agencies through content management system partners, platform and agency partners, authorized resellers, and the marketplace. AudioEye, Inc. was incorporated in 2005 and is based in Tucson, Arizona.

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. The company also provides scenes, video analytics triggers, thermostat schedules, responsive savings, precision comfort, energy usage monitoring, places feature, whole home water safety, and solar monitoring solutions, as well as heating, ventilation, and air conditioning monitoring services. In addition, it offers demand response programs, commercial grade video, commercial video analytics, access control, cell connectors, enterprise dashboard and multi-site management, energy savings, protection for valuables and inventory, temperature monitoring, and daily safeguard solutions. Further, the company provides a permission-based online portal that provides account management, sales, marketing, training, and support tools; a unified interface that displays key operational and customer experience indicators, including technician performance, system reliability and customer engagement metrics; installation and support services; MobileTech Application and Remote Toolkit; video health reports; smart gateway; AI-powered enhancements to professional monitoring and false alarm reduction; Web services and business intelligence; sales, marketing, and training services; and home builder programs. Additionally, it offers electric utility grid and water management, indoor gunshot detection, and health and wellness and data-rich emergency response solutions. The company was founded in 2000 and is based in Tysons, Virginia.