ARLO Stock Forecast & Price Target

Arlo Technologies Inc. is witnessing a positive transition towards higher product revenues while moving between various product models, indicating strong market demand and adaptability. The company's focus on expanding its recurring revenue streams through subscription services like Arlo Secure is expected to contribute to incremental revenue growth and potentially enhance its trading multiples. Additionally, consumer preference for smart home security solutions is robust, suggesting that Arlo is well-positioned to capture market share in a rapidly evolving industry.

Arlo Technologies, Inc. is facing significant financial challenges, as evidenced by a decline in gross margin to 41.4 percent, marking the lowest level reported for 2025. The company's inventory management issues have resulted in a lag in service revenue compared to its annualized recurring revenue, indicating difficulties in converting customers into paid accounts. Furthermore, the ongoing history of operating losses raises concerns about the sustainability of its business model, coupled with potential additional costs arising from partnerships with voice assistant providers that could further erode operating results.