Critical Survey: Wrap Technologies (NASDAQ:WRAP) and Alarm.com (NASDAQ:ALRM)

Alarm.com (NASDAQ:ALRM) and Wrap Technologies (NASDAQ:WRAP) are both industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, dividends, profitability, institutional ownership and valuation.

Insider & Institutional Ownership

91.7% of Alarm.com shares are owned by institutional investors. Comparatively, 8.8% of Wrap Technologies shares are owned by institutional investors. 5.8% of Alarm.com shares are owned by company insiders. Comparatively, 33.3% of Wrap Technologies shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Alarm.com and Wrap Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alarm.com	12.92%	14.26%	5.32%
Wrap Technologies	-300.11%	-194.93%	-83.58%

Earnings and Valuation

This table compares Alarm.com and Wrap Technologies”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alarm.com	$939.83 million	2.75	$124.12 million	$2.36	21.95
Wrap Technologies	$4.50 million	24.84	-$5.88 million	($0.30)	-7.23

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Alarm.com and Wrap Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alarm.com	0	3	0	2	2.80
Wrap Technologies	1	0	0	0	1.00

Alarm.com currently has a consensus target price of $64.67, indicating a potential upside of 24.82%. Given Alarm.com’s stronger consensus rating and higher possible upside, equities analysts plainly believe Alarm.com is more favorable than Wrap Technologies.

Volatility and Risk

Alarm.com has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, Wrap Technologies has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500.

Summary

Alarm.com beats Wrap Technologies on 11 of the 14 factors compared between the two stocks.

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.

About Wrap Technologies

Wrap Technologies, Inc., a public safety technology and services company, develops policing solutions to law enforcement and security personnel. The company's flagship product is BolaWrap 150, a handheld remote restraint device that discharges a seven and a half-foot Kevlar tether, entangling an individual from a range of 10-25 feet. It also offers virtual reality training system, a law enforcement 3D training system employing immersive computer graphics VR with proprietary software-enabled content. It operates in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company was incorporated in 2007 and is based in Tempe, Arizona.