ARLO Stock Forecast & Price Target

Arlo Technologies Inc. is experiencing an upward trajectory in product revenue, surpassing expectations amid a transition between product models, indicating a solid demand for its security solutions. The company's strategy to augment recurring revenue through its robust subscription services, such as Arlo Secure, positions it for incremental financial growth and the potential for a higher trading multiple. Additionally, with a strong emphasis on security and safety among prospective smart home customers, Arlo is well-positioned to capture and sustain market share despite competitive pressures in the evolving smart home landscape.

Arlo Technologies, Inc. has experienced a decline in gross margin, dropping to 41.4 percent, which marks the lowest figure reported in 2025. The company faces significant operational challenges, particularly in inventory management, which has resulted in delays in customer acquisition of paid accounts and lagging service revenue relative to its annualized recurring revenue (ARR). Furthermore, Arlo's history of operating losses raises concerns regarding its long-term financial stability, compounded by potential future costs associated with partnerships that currently do not impose licensing fees, which could negatively impact operating results.