Alarm.com Holdings, Inc. (ALRM) vs Freshworks Inc. (FRSH)

Alarm.com Holdings, Inc. and Freshworks Inc. are both Software Application companies. Alarm.com Holdings, Inc. and Freshworks Inc. are of similar size ($3.7B and $3.3B). Freshworks Inc. trades at the lower P/E: 17.2× against 28.1×. Freshworks Inc. grew revenue faster over the last twelve months: 15.2% against 9.30%. Freshworks Inc. has the higher net margin (22.3% vs 11.1%) and the higher return on invested capital (19.0% vs 9.71%). Across the 22 metrics below, Freshworks Inc. leads on 17 and Alarm.com Holdings, Inc. on 5.

Valuation

Metric ALRM FRSH Software Application median
P/E 28.09 17.17 25.90
P/S 3.11 3.56 3.04
P/B 3.82 3.64 2.60
Price to free cash flow 18.40 14.09 17.17
EV/EBITDA 20.03 20.18 15.48
EV/Sales 3.59 2.81 2.89
Earnings yield 3.56% 5.83% 0.00%
Free cash flow yield 5.44% 7.10% 1.98%

Profitability

Metric ALRM FRSH Software Application median
Gross margin 65.81% 85.13% 66.89%
Operating margin 12.83% 7.06% 0.00%
Net margin 11.11% 22.28% 0.00%
Free cash flow margin 17.59% 25.28% 5.77%
Return on equity 14.19% 23.58% 0.00%
Return on assets 6.28% 14.51% 0.00%
Return on invested capital 9.71% 18.99% 0.00%

Growth

Metric ALRM FRSH Software Application median
Revenue growth (TTM) 9.30% 15.24% 12.27%
EPS growth (last fiscal year) 7.42% 296.88% 32.11%
Revenue growth, 5-year CAGR 10.35% 27.43% 14.34%
Net income growth, 5-year CAGR 11.23% 0.00% 0.00%

Health

Metric ALRM FRSH Software Application median
Debt to equity 0.57 0.00 0.02
Current ratio 4.96 1.77 1.53
Net debt to EBITDA 0.16 (13.14) 0.09

Dividend

Metric ALRM FRSH Software Application median
Dividend yield — — 1.10%
Payout ratio — — 0.28

Size

Metric ALRM FRSH Software Application median
Market cap 3.34b 3.66b 487.58m

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