Arlo's Recurring Revenue Platform, AI Push Support Long-Term Outlook, Oppenheimer Says
Arlo Technologies' (ARLO) recurring revenue platform, expanding strategic partnerships and growing artificial intelligence capabilities position the company for long-term subscriber and revenue growth, Oppenheimer said in a report Monday.The home security company has transformed from a "low-cost camera vendor" into a premium, subscription-first home security platform with strong long-term growth potential, the firm said.Subscriptions and services accounted for 60% of its 2025 revenue at an 85% gross margin, while annual recurring revenue rose 28% to $330 million, according to the report.The firm said that partnerships with ADT (ADT), Samsung and Comcast (CMCSA) provide a multi-year "subscriber growth" opportunity that is not fully reflected in Wall Street estimates.Arlo's "independence" from major technology companies is a competitive advantage in the home security market, the firm said.Oppenheimer initiated coverage of Arlo Technologies with an outperform rating and a $20 price target.Price: $12.86, Change: $+0.54, Percent Change: +4.34%