ARLO Stock Forecast & Price Target

Arlo Technologies Inc. is experiencing higher-than-expected product revenue as it transitions between product models, which suggests a robust demand for its security and video monitoring solutions. The company's strategic focus on expanding recurring revenue through subscription services, especially Arlo Secure, is expected to generate incremental revenue and potentially enhance its market valuation. Additionally, the growing consumer preference for enhanced security and safety in smart home solutions positions Arlo favorably within a competitive landscape, as these factors may help solidify its market share despite challenges from better-capitalized competitors.

Arlo Technologies, Inc. has reported a concerning gross margin of 41.4 percent, marking the lowest level observed in 2025, which could signal inefficiencies in cost management or pricing strategies. Additionally, the company's inventory management issues have led to a delay in transforming customers into paid accounts, causing a lag in service revenue compared to its annualized recurring revenue (ARR). Furthermore, Arlo’s history of operating losses, potential future licensing fees from partnerships, and risks associated with changing industry dynamics and competition contribute to a negative financial outlook for the company.