Arlo Technologies: BWS Financial Raises PT to $26, Maintains Buy Rating

Arlo Technologies: BWS Financial Raises PT to $26, Maintains Buy Rating

Arlo Technologies (NYSE: ARLO) has seen its price target (PT) raised to $26 by BWS Financial, while the brokerage firm maintains its "Buy" rating on the company. The upgrade reflects growing confidence in Arlo's financial performance and market position.

In its Q2 2025 earnings report, Arlo Technologies reported a second-quarter EPS of $0.170, $0.02 better than the analyst estimate of $0.150. Revenue for the quarter came in at $129.4M, surpassing the consensus estimate of $123.33M [1]. The company's stock price closed at $16.44, up 32.260% in the last three months and 21.780% in the last 12 months.

Arlo Technologies' Q2 results highlight a 30% year-over-year (YoY) subscription revenue surge to $78M, now 60% of total revenue, driven by its services-first model [3]. The company achieved a record 85% non-GAAP service gross margin, outpacing hardware peers, while expanding consolidated margins by 800 bps to 46%. A strategic ADT partnership and 5.1M paid subscribers (29% YoY growth) position Arlo to capture $100B smart home market share through recurring revenue scalability.

BWS Financial's PT increase reflects the company's strong performance and market potential. Arlo's transition to a services-centric business model has driven profitability, with recurring revenue streams providing stability and predictability. The company's strategic partnerships and market momentum further support its growth prospects.

Arlo Technologies' Q2 earnings and BWS Financial's PT upgrade indicate a strategic buy opportunity for investors seeking exposure to the smart home revolution. The company's ability to monetize its ecosystem of connected devices and services, coupled with its financial discipline, positions it as a leader in a sector poised for decades of growth.

References:
[1] https://ca.investing.com/news/earnings/arlo-technologies-earnings-beat-by-002-revenue-topped-estimates-4145062
[3] https://www.ainvest.com/news/arlo-technologies-strong-q2-earnings-signal-strategic-buy-opportunity-2508/