ARLO Stock Forecast & Price Target

Arlo Technologies Inc. has demonstrated a positive trend with higher-than-expected product revenue amidst a transition between product models, indicating robust demand for its offerings. The company's strategic focus on expanding recurring revenue through its subscription services, particularly Arlo Secure, is expected to drive incremental revenue growth and enhance overall valuation multiples. Additionally, the increasing emphasis on security and safety as a priority for prospective customers positions Arlo favorably within the rapidly evolving smart home market, despite competitive pressures.

Arlo Technologies has reported a substantial decline in gross margins, dropping to 41.4 percent, the lowest level recorded in 2025, which raises concerns about profitability. The company is confronting challenges with inventory management, leading to delays in customer conversions to paid accounts, ultimately causing service revenue to lag behind its annualized recurring revenue (ARR). Additionally, the persistent history of operating losses and the potential introduction of licensing fees by voice assistant partners pose significant risks to Arlo's future operating results and financial stability.