Alarm.com Holdings, Inc. Stock Jumps -- Here's Why

Image source: Alarm.com.

What: Shares of connected home technology company Alarm.com soared as much as 27.9% on Friday after the company announced better-than-expected quarterly results and guidance. Shares are up about 26% at the time of this writing.

So what: For Alarm.com's fourth quarter, the company reported revenue and non-GAAP EPS of $57 million and $0.14, respectively. The quarter's revenue represented 25% year-over-year growth, and EPS worsened compared to Alarm.com's year-ago EPS of $0.34. Analysts, on average, were expecting the company to report revenue and non-GAAP EPS of $47 million and $0.01. So, the results were well ahead of expectations.

For 2016, Alarm.com management guided for total revenue of $236 million to $239.5 million and non-GAAP EPS $0.46 to $0.48, respectively. Analysts, on average, were expecting 2016 revenue and EPS of $232 million and $0.16, below management's guidance.

Now what: Alarm.com CEO Steve Trundle said in Alarm.com's fourth-quarter press release the company's fourth-quarter and full-year results positioned it well for 2016. Further, he noted the company's "service provider partners continued to see strong demand" for its interactive services it enables in North America "and increasingly abroad."

Alarm.com's guidance for about 14% year-over-year revenue growth in 2016 reflects management's optimism about the company's growth prospects.

The article Alarm.com Holdings, Inc. Stock Jumps -- Here's Why originally appeared on Fool.com.

Daniel Sparks has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.