ARLO Stock Forecast & Price Target

Arlo Technologies Inc. is experiencing a favorable shift in product revenue as the company transitions between product models, indicating strong demand for its security and video monitoring solutions. The planned focus on expanding recurring revenue through subscription services like Arlo Secure presents an opportunity for incremental revenue growth and potentially a higher trading multiple. Additionally, the increasing consumer prioritization of security and safety in smart home technologies positions Arlo to benefit from a growing market, despite competition from more capitalized rivals.

Arlo Technologies, Inc. reported a gross margin decline to 41.4 percent, marking the lowest level in 2025, which raises concerns about the company's profitability. The company has also experienced inventory management challenges that have delayed customer transitions to paid accounts, negatively impacting service revenue relative to its annualized recurring revenue (ARR). Additionally, Arlo's history of operating losses, the potential introduction of licensing fees from partners, and various industry risks threaten the company’s financial stability and could persist for an extended period.