Arlo Technologies, Inc.

Where It Passes

Where It Falls Short

• Valuation0% pass✗ 28▾

  All 13 investors flag ARLO's valuation

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio9.9x

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)P/E 84.7x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value0.5%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=0.5%, ROC=N/A (invested capital <= 0)

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS84.7x

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)16.1x

  ✗Dreman< 8x

  Price / Book Value per Share9.9x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessP/E=84.7x, OE Yield=1.5%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=84.7x

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=84.7x, P/B=9.9x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share

  ✗Ackman<= 25

  Price vs. Trailing Low121% of trailing low ($9.83)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization+1.92%; #2753/6340 (top 43.4%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.1339; #4560/6449 (top 70.7%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS84.7x

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share10.85x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change-28.0%

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.4680; #2720/5247 (top 51.8%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-9.60%; #3409/6202 (top 55.0%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Growth0% pass✓ 3✗ 10▾

  No clean pass — all 8 investors flag at least one growth criterion

  EPS Growth (3-yr avg, 10-yr window)N/A (negative base EPS)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)P/E 84.7x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 17.8% vs Rev: 17.1%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction$-0.22 (2016) -> $0.14 (2025)

  ✓DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency2/10 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth3.6%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency4/5 years with positive EPS growth

  ✓AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 34.1% -> 44.0%, operating margin -5.1% -> 1.1%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR8.2%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Efficiency0% pass✓ 1✗ 10▾

  No clean pass — all 8 investors flag at least one efficiency criterion

  Current Ratio1.47

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)-19.3%

  ✗Buffett> 10%

  ROIC - WACC-29.3%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)N/A (invested capital <= 0)

  ✗Greenblatt> 25%

  Current Ratio Change YoY1.49 -> 1.51

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY1.71x -> 1.70x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities1.47

  ✗Dreman> 1.5

  Return on Invested Capital

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=unavailable; FY2024: ROIC=unavailable; FY2025: ROIC=unavailable

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)

  ✗SleepROIC > 12% in a majority of years
• Verdicts0% pass✗ 13▾

  Split decision: 13 FAIL · 3 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (1/9)✗LynchFAIL (1/7)•GreenblattNot ranked•PiotroskiNEUTRAL (F-Score 7)✗DremanFAIL (3/11)✗MungerFAIL (0/4)✗PabraiFAIL (0/3)✗AkreFAIL (0/6)✗MarksFAIL (0/5)✗AckmanFAIL (2/9)✗TempletonFAIL (2/8)✗SleepFAIL (2/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (1/6)✗SchlossFAIL (0/7)•OshaughnessyNEUTRAL (Not ranked)
• Valuation models0% pass✗ 2▾

  ARLO overvalued: all 2 models price fair value below $11.86 (median $1.58)

  Graham fair value$1.94

  ✗Graham-511.3% margin vs $11.86

  Pabrai fair value$1.23

  ✗Pabrai-864.2% margin vs $11.86
• Profitability6% pass✓ 9✗ 26▾

  15 of 16 flag ARLO's profitability — Graham, Buffett, Lynch +12 more

  Positive EPS (10 years)2/11 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)N/A (negative base EPS)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)2/11 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-30.8%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)1.1% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-30.0M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)N/A (negative mean EPS)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)P/E 84.7x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE14.4%

  ✗Lynch> 15%

  EBIT / Enterprise Value0.5%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=0.5%, ROC=N/A (invested capital <= 0)

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets4.81%

  ✓PiotroskiROA > 0

  ROA Change YoY-10.22% -> 4.81% (delta: +15.03%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=25.35%, ROA=4.81%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY36.7% -> 44.0%

  ✓PiotroskiImproved YoY

  Pre-Tax Income / Revenue4.5%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity14.4%

  ✓Dreman> 12%

  Margin of SafetyP/E=84.7x, P/B=9.9x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity-13.3% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency2/10 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue2.6%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity14.4%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend-5.1% (2023) -> 1.1% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 34.1% -> 44.0%, operating margin -5.1% -> 1.1%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization+1.92%; #2753/6340 (top 43.4%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+74.31%; #296/3702 (top 8.0%)

  ✓AsnessTop 30% of eligible cross-section

  Net income / positive book equity+14.36%; #1228/5226 (top 23.5%)

  ✓AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0870; #3306/5884 (top 56.2%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years2/10 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Debt & Leverage8% pass✓ 1✗ 14▾

  11 of 12 flag ARLO's debt & leverage — Graham, Buffett, Lynch +8 more

  LT Debt vs Net Current Assets

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest Coverage

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity

  ✗Lynch< 0.33

  Cash - Long-term Debt

  ✗LynchPositive preferred

  LT Debt / Total Assets Change0.00% -> 0.00%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities1.47

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt Levels

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDA

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)

  ✗AsnessTop 30% of eligible cross-section
• Cash Flow20% pass✓ 3✗ 9▾

  8 of 10 flag ARLO's cash flow — Buffett, Dreman, Pabrai +5 more

  Free Cash Flow Proxy$-30.0M

  ✗BuffettPositive and growing

  FCF Positive and Growing$48.6M

  ✓LynchPositive and growing

  Operating Cash Flow$78.7M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=25.35%, ROA=4.81%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)16.1x

  ✗Dreman< 8x

  P/E or FCF YieldP/E=84.7x

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive3/9 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap

  ✗Ackman>= 4%

  Price / FCF per Share

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency4/10 years positive

  ✗SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section