Is Arlo Technologies ready for primetime?

Roth Capital Markets analyst Scott Searle maintained a “Buy” rating and $22.00 12-month target on Arlo Technologies (Arlo Technologies Stock Quote, Chart, News, Analysts, Financials NASDAQ:ARLO) in a February 17 report, arguing that recent privacy backlash at Amazon-owned Ring highlights Arlo’s competitive positioning.

Arlo, headquartered in California, provides wireless 2K/4K home security cameras, video doorbells and floodlights for indoor and outdoor monitoring.

Searle said Ring’s now-scrapped “community requests” feature, which would have allowed opt-in access to user video by law enforcement, has reinforced consumer privacy concerns around connected home security.

“Privacy is a meaningful and legitimate concern for cloud-based video solutions,” Searle said, adding that Arlo’s “core privacy-oriented DNA and culture” should drive incremental market share and deepen engagement with strategic partners including ADT, Allstate and Verisure.

Searle said he believes the fallout from Ring’s Super Bowl ad and subsequent feature termination could benefit Arlo in two ways: by shifting consumer demand away from Ring and by strengthening Arlo’s appeal to enterprise and insurance partners wary of privacy risk.

Searle expects Arlo to report in-line fourth-quarter results on Feb. 26, modelling revenue of $131-million to $141-million and EPS of $0.13 to $0.19. He forecasts annual recurring revenue growth approaching 30%, with subscription and services revenue of approximately $83-million in the quarter.

While investor concerns persist around consumer electronics demand and rising memory costs, Searle said Arlo’s Series 6 product launch, featuring a 20–30% bill-of-materials reduction, should help offset gross margin pressure. Product gross margins were negative 15% in the third quarter, and Roth continues to model negative product margins “for the foreseeable future,” with SaaS driving profitability.

With shares down roughly 40% since November 1, 2025, versus a roughly 5% decline for the Nasdaq Composite over the same period, Searle sees valuation support. The stock trades at approximately 1.9x EV/2026 revenue, or about 2.9x EV/2026 SaaS revenue, compared with 3x–7x for similar growth SaaS peers.

Searle forecasts Arlo will generate Adjusted EBITDA of $69.5-million on revenue of $519.0-million in fiscal 2025, improving to $83.5-million on revenue of $562.4-million in fiscal 2026.

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