What happened?
Shares of smart security company Arlo (NYSE: ARLO) jumped 5.8% in the afternoon session after the company announced that its board of directors authorized a stock repurchase program of up to $100 million of its common stock. According to the company’s press release, the authorization runs through Dec. 31, 2028. Shares will be bought in the open market under Rule 10b-18, with the pace set by price and volume. Chief Executive Matthew McRae said the size of the program reflects the board and management’s view that the shares are undervalued relative to Arlo’s long-term value, and that the company can buy stock and still fund the rest of its capital plan.
After the initial pop, the shares cooled down to $12.99, up 4.9% from the previous close.
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What is the market telling us
Arlo Technologies’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock gained 28.4% on the news that the company reported strong fourth-quarter 2025 financial results that surpassed expectations and provided an upbeat forecast. For the quarter, Arlo announced adjusted earnings of $0.22 per share, which was well ahead of the $0.16 analysts had predicted. Revenue also topped forecasts, coming in at $141.3 million, a 16.2% increase year on year. Adding to the positive news, Arlo provided strong guidance for the first quarter of 2026, projecting revenue of $140 million at the midpoint, which was significantly higher than market expectations. The results were strong across the board, with the company also beating expectations for adjusted EBITDA, and its operating margin turned positive compared to a loss in the year-ago quarter.
Arlo Technologies is down 1.8% since the beginning of the year, and at $12.99 per share, it is trading 32.8% below its 52-week high of $19.34 from October 2025. Despite the year-to-date decline, investors who bought $1,000 worth of Arlo Technologies’s shares 5 years ago would now be looking at an investment worth $1,962.
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