ARLO Stock Forecast & Price Target

Arlo Technologies is compelling because its business has shifted from a low-margin hardware vendor toward a recurring, service-led platform, with subscriptions and services now representing 60% of revenue and carrying about 85% gross margin. The company’s 2025 results show this mix shift translating into real financial momentum: revenue rose to $529M, ARR grew 28% to $330M, paid accounts reached 5.7M, adjusted EBITDA increased 85% to $75M, and free cash flow climbed 38% to $67M. Its bullish case is further supported by low churn, strong retail economics, and multi-year partnership optionality from Verisure, ADT, Samsung, and Comcast, which should broaden subscriber growth while expanding margins over time.

Arlo Technologies is facing a fragile growth setup because its 2025 revenue mix is already exposed to partner concentration, with Verisure representing 32% of revenue and no minimum purchase obligations, while delays in integrating large strategic partners beyond 2H26 could materially weaken the service revenue trajectory. Its premium subscription model also looks vulnerable: retail ARPU was $15.30 in 2025, three straight price increases in 2023, 2024, and 2025 may be nearing churn limits, and broader competition from Amazon, Google, Wyze, Eufy, and TP-Link is commoditizing both hardware and AI-led features. A major 2027 refresh is critical, yet any miss could compress product revenue and reduce upsell opportunities, while a single data breach or ransomware event could severely damage Arlo’s privacy-based brand and partnership trust.