ARLO Stock Forecast & Price Target

Arlo Technologies Inc. has demonstrated higher-than-expected product revenue amid a transition between product models, indicating effective management of its product lineup. The company's strategic shift towards increasing recurring revenue through subscription services, such as Arlo Secure, positions it for long-term financial growth and the potential to achieve a higher trading multiple. Furthermore, with heightened consumer interest in smart home security solutions, Arlo is well-placed to capitalize on this market demand, despite facing competition from well-capitalized rivals.

Arlo Technologies Inc. has reported a decline in gross margin to 41.4 percent, representing the lowest level recorded in 2025, indicating potential challenges in operational efficiency and cost management. The company's struggle with inventory management has led to a lag in converting customers to paid accounts, resulting in slower growth of service revenue relative to its annualized recurring revenue (ARR). Additionally, the ongoing history of operating losses raises concerns about the sustainability of the business model, compounded by risks associated with changing customer demand and competitive pressures within the industry.