Sprinklr, Procore, Alarm.com, and Pegasystems Stocks Trade Up, What You Need To Know

What Happened?

A number of stocks jumped in the morning session after cooler-than-expected inflation data ignited investor optimism for a potential Federal Reserve interest rate cut. The July Consumer Price Index (CPI) report, an important measure of inflation, came in cooler than expected, showing prices holding steady at an annual rate of 2.7%. This data has led to speculation that the Federal Reserve might lower interest rates. For growth-focused sectors like SaaS, lower interest rates are particularly beneficial as they increase the present value of companies' future earnings, making their stocks more appealing.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Vertical Software company Alarm.com jumped 3%. Is now the time to buy Alarm.com? Access our full analysis report here, it’s free.
• Vertical Software company Manhattan Associates jumped 3.7%. Is now the time to buy Manhattan Associates? Access our full analysis report here, it’s free.

Zooming In On Manhattan Associates (MANH)

Manhattan Associates’s shares are somewhat volatile and have had 12 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 previous big move we wrote about was 20 days ago when the stock gained 8% on the news that the company reported second-quarter results that beat analyst expectations and raised its full-year guidance. The company announced adjusted earnings per share of $1.31 on revenue of $272.4 million for the quarter. These figures surpassed Wall Street's consensus estimates, which had predicted earnings of $1.13 per share on $263.6 million in revenue.

A key driver of the strong performance was a 22% year-over-year increase in cloud subscription revenue. The company also reported that its remaining performance obligations (RPO), a metric indicating future revenue under contract, grew by 26% and surpassed the $2 billion mark. Following the strong quarter, Manhattan Associates lifted its financial forecast for the full year. It now expected adjusted earnings per share to be between $4.76 and $4.84, up from a previous forecast. The company also raised its full-year revenue guidance to a range of $1.071 billion to $1.075 billion. This positive "beat and raise" report signaled strong demand for its supply chain solutions, even in a challenging economic environment.

Manhattan Associates is down 21.2% since the beginning of the year, and at $211.86 per share, it is trading 31.6% below its 52-week high of $309.78 from December 2024. Investors who bought $1,000 worth of Manhattan Associates’s shares 5 years ago would now be looking at an investment worth $2,286.

Home security and automation software provider Alarm.com reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 8.8% year on year to $254.3 million. The company’s full-year revenue guidance of $993.2 million at the midpoint came in 0.7% above analysts’ estimates. Its non-GAAP profit of $0.60 per share was 18.1% above analysts’ consensus estimates.

Is now the time to buy ALRM? Find out in our full research report (it’s free).

Alarm.com (ALRM) Q2 CY2025 Highlights:

• Revenue: $254.3 million vs analyst estimates of $243.8 million (8.8% year-on-year growth, 4.3% beat)
• Adjusted EPS: $0.60 vs analyst estimates of $0.51 (18.1% beat)
• Adjusted Operating Income: $45.78 million vs analyst estimates of $29.11 million (18% margin, 57.3% beat)
• The company slightly lifted its revenue guidance for the full year to $993.2 million at the midpoint from $983.5 million
• Adjusted EPS guidance for the full year is $2.40 at the midpoint, beating analyst estimates by 4.5%
• EBITDA guidance for the full year is $195.8 million at the midpoint, above analyst estimates of $192.1 million
• Operating Margin: 12.6%, up from 11% in the same quarter last year
• Billings: $254 million at quarter end, up 7.9% year on year
• Market Capitalization: $2.66 billion

StockStory’s Take

Alarm.com’s Q2 results came in ahead of Wall Street expectations, with management pointing to broad-based contributions across its business units. CEO Stephen Trundle highlighted the strength of the commercial, international, and EnergyHub segments, each growing close to 25% year-over-year, as key drivers. He also noted that robust hardware sales contributed to the quarter’s performance, aided in part by service providers building inventory due to tariff uncertainty. Trundle emphasized the company’s efficiency in customer acquisition, stating that its channel partners and low sales and marketing spend remain a competitive advantage.

Looking forward, management is banking on continued momentum in the commercial, international, and energy markets to sustain growth and profitability through the rest of the year. CFO Kevin Bradley indicated that tariff pass-throughs and stable inventory positions should help the company manage cost pressures. Trundle explained, “We’re not anticipating or modeling a significant change in the macro in the back half of the year,” underscoring that security remains a must-have service even in uncertain economic conditions. The company also expects recent regulatory changes to strengthen its long-term cash flow outlook.

Key Insights from Management’s Remarks

Management attributed the quarter’s outperformance to steady residential demand and above-plan contributions from hardware, commercial, and energy solutions, alongside strategic inventory management amid tariff concerns.

• Commercial segment momentum: Alarm.com’s commercial business, including the OpenEye subsidiary, saw continued adoption of unified video, access control, and intrusion solutions. The rollout of new AI-powered forensic video tools enhanced value for enterprise customers and supported ongoing growth.
• EnergyHub secular growth: The EnergyHub platform benefited from increased demand among utility customers, driven by the expansion of AI data centers and manufacturing reshoring. Management cited this as a durable trend supporting both device adoption and the distributed energy resource management system (DERMS) offerings.
• International expansion: The international business delivered faster-than-expected growth, with notable acceleration in Latin America and the Middle East. Adoption of remote video monitoring solutions was especially strong in these regions, highlighting early-stage market penetration compared to North America.
• Residential stability: Despite a sluggish housing market, Alarm.com’s core residential segment maintained steady growth and strong cash flow. Management noted that professional installation and integrated security solutions remain preferred by serious consumers, supporting resilience in subscriber trends.
• Tariff and inventory strategy: The company proactively raised hardware prices to reflect new tariffs, allowing margin stability while minimizing near-term risk. Some service provider partners increased inventory to hedge against supply uncertainties, which contributed to elevated hardware sales in the quarter.

Drivers of Future Performance

Alarm.com’s outlook is shaped by the durability of its recurring revenue base across commercial, energy, and international segments, as well as the company’s ability to navigate tariff and macroeconomic pressures.

• Growth in non-residential segments: Management expects the commercial, EnergyHub, and international businesses to sustain growth rates near 25%, underpinned by secular demand for advanced security, energy management, and international expansion. Trundle noted that these segments’ combined contribution to SaaS revenue is approaching 30% and becoming more meaningful to overall results.
• Tariff management and cost control: The company’s ability to pass through tariff-induced hardware costs and manage inventory positions is expected to shield margins and provide predictability for the remainder of 2025. Bradley stated that gross profit from hardware should remain steady, supporting its efficient customer acquisition model.
• Macro and housing market exposure: While new home sales remain a headwind to accelerated residential subscriber growth, management believes the core security market is less sensitive to broader economic cycles. However, any improvement in housing activity could lift new account activations, partially offset by higher churn from customer relocations.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) the pace of adoption for new AI-powered video analytics within commercial and enterprise accounts, (2) the sustained growth trajectory of the EnergyHub platform as utility demand evolves, and (3) international market expansion, especially in Latin America and the Middle East. Any shifts in housing market activity or regulatory developments around tariffs will also be important for future performance.

Alarm.com currently trades at $53.44, down from $54.38 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).

Now Could Be The Perfect Time To Invest In These Stocks

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return).

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how automation software stocks fared in Q2, starting with Jamf .

The whole purpose of software is to automate tasks to increase productivity. Today, innovative new software techniques, often involving AI and machine learning, are finally allowing automation that has graduated from simple one- or two-step workflows to more complex processes integral to enterprises. The result is surging demand for modern automation software.

The 6 automation software stocks we track reported an exceptional Q2. As a group, revenues beat analysts’ consensus estimates by 9.1% while next quarter’s revenue guidance was in line.

Thankfully, share prices of the companies have been resilient as they are up 8.4% on average since the latest earnings results.

Jamf

Founded in 2002 by Zach Halmstad and Chip Pearson, right around the time when Apple began to dominate the personal computing market, Jamf provides software for companies to manage Apple devices such as Macs, iPads, and iPhones.

Jamf reported revenues of $176.5 million, up 15.3% year on year. This print exceeded analysts’ expectations by 4.7%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ annual recurring revenue estimates and an impressive beat of analysts’ billings estimates.

Jamf delivered the weakest full-year guidance update of the whole group. Interestingly, the stock is up 7.6% since reporting and currently trades at $7.92.

Is now the time to buy Jamf? Access our full analysis of the earnings results here, it’s free.

Best Q2: SoundHound AI

Founded in 2005, SoundHound AI develops independent voice artificial intelligence solutions that enable businesses across various industries to offer customized conversational experiences to consumers.

SoundHound AI reported revenues of $42.68 million, up 217% year on year, outperforming analysts’ expectations by 31.2%. The business had an incredible quarter with a solid beat of analysts’ billings estimates and an impressive beat of analysts’ EBITDA estimates.

SoundHound AI scored the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 45.6% since reporting. It currently trades at $15.65.

Is now the time to buy SoundHound AI? Access our full analysis of the earnings results here, it’s free.

Slowest Q2: Pegasystems

Founded by Alan Trefler in 1983, Pegasystems offers a software-as-a-service platform to automate and optimize workflows in customer service and engagement.

Pegasystems reported revenues of $384.5 million, up 9.5% year on year, exceeding analysts’ expectations by 5.9%. It may have had the worst quarter among its peers, but its results were still good as it also locked in an impressive beat of analysts’ EBITDA estimates.

Pegasystems delivered the slowest revenue growth in the group. The stock is flat since the results and currently trades at $50.74.

Read our full analysis of Pegasystems’s results here.

ServiceNow

Founded by Fred Luddy, who coded the company's initial prototype on a flight from San Francisco to London, ServiceNow is a software provider helping companies automate workflows across IT, HR, and customer service.

ServiceNow reported revenues of $3.22 billion, up 22.4% year on year. This number surpassed analysts’ expectations by 2.9%. Overall, it was an exceptional quarter as it also logged a solid beat of analysts’ billings estimates and a solid beat of analysts’ EBITDA estimates.

ServiceNow had the weakest performance against analyst estimates among its peers. The stock is down 10% since reporting and currently trades at $859.50.

Read our full, actionable report on ServiceNow here, it’s free.

Microsoft

Short for microcomputer software, Microsoft is the largest software vendor in the world with its Windows operating system, Office suite, and cloud computing services.

Microsoft reported revenues of $76.44 billion, up 18.1% year on year. This result topped analysts’ expectations by 3.5%. It was an exceptional quarter as it also produced a narrow beat of analysts’ revenue estimates, as Personal Computing, Intelligent Cloud, and Business Services all beat and an impressive beat of analysts’ operating income estimates.

The stock is up 1.6% since reporting and currently trades at $522.30.

Read our full, actionable report on Microsoft here, it’s free.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages. Just because a business is in the green today doesn’t mean it will thrive tomorrow.

Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. Keeping that in mind, here are two profitable companies that leverage their financial strength to beat the competition and one best left off your watchlist.

One Stock to Sell:

Alarm.com (ALRM)

Trailing 12-Month GAAP Operating Margin: 12.9%

Founded in 2000 as a business unit within MicroStrategy, Alarm.com is a software-as-a-service platform that enables users to control their security systems and smart home appliances from a single app.

Why Are We Cautious About ALRM?

• Average billings growth of 7.4% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
• Estimated sales growth of 3.8% for the next 12 months implies demand will slow from its three-year trend
• Gross margin of 65.8% is below its competitors, leaving less money to invest in areas like marketing and R&D

Alarm.com is trading at $54.03 per share, or 3.2x forward price-to-sales. To fully understand why you should be careful with ALRM, check out our full research report (it’s free).

Two Stocks to Watch:

Allison Transmission (ALSN)

Trailing 12-Month GAAP Operating Margin: 31.3%

Helping build race cars at one point, Allison Transmission offers transmissions to original equipment manufacturers and fleet operators.

Why Are We Fans of ALSN?

• Superior product capabilities and pricing power result in a best-in-class gross margin of 47.9%
• Disciplined cost controls and effective management resulted in a strong long-term operating margin of 29.3%, and its profits increased over the last five years as it scaled
• Strong free cash flow margin of 20.2% enables it to reinvest or return capital consistently

Allison Transmission’s stock price of $87.73 implies a valuation ratio of 12.8x forward EV-to-EBITDA. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

Pure Storage (PSTG)

Trailing 12-Month GAAP Operating Margin: 2.9%

Founded in 2009 as a pioneer in enterprise all-flash storage technology, Pure Storage provides all-flash data storage hardware and software that helps organizations manage their data more efficiently across on-premises and cloud environments.

Why Should You Buy PSTG?

• Ability to secure long-term commitments with customers is evident in its 23.5% average ARR growth over the past two years
• Incremental sales over the last five years have been highly profitable as its earnings per share increased by 29.5% annually, topping its revenue gains
• Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety

At $58.45 per share, Pure Storage trades at 32.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return).

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.