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The Zacks Security and Safety Services industry is poised for growth on the back of increasing demand for products and solutions, driven by rising awareness about the security and safety of people and infrastructure. The growing demand for cybersecurity products is also benefiting many participants within the industry.
Enhanced research and development efforts, backed by government support, augur well for the industry’s near-term prospects. Companies like Allegion plc, Life360, Inc., Alarm.com Holdings, Inc. and Cadre Holdings, Inc. are a few industry participants that may capitalize on these opportunities.
Industry Description
The Zacks Security and Safety Services industry comprises firms that provide sophisticated and interactive security solutions and related services, which are meant to be used for residential, commercial and institutional purposes. A few industry players develop electrical weapons for personal defense and military, federal, law enforcement and private security.
Some of the companies provide solutions for the recovery of stolen vehicles, wireless communication devices, equipment for the safety of facility infrastructure and employees and products for detecting hazards. A few players provide a variety of services to automobile owners and insurance companies. The industry serves customers from various end markets, including manufacturing, electronics, hospitality, education, construction, telecommunications, aerospace and medical.
3 Security & Safety Services Industry Trends in Focus
Healthy Demand for Security and Safety Services: Growing instances of terrorism and criminal activities, with concerns related to the ever-increasing fraudulent activities, are promoting demand for security and safety services. To enhance the safety and surveillance of people or assets, governments, commercial operations, communities and other establishments across the world are rapidly deploying IP-based cameras.
This is acting as a key growth driver for the industry. With growing urbanization, the increasing requirement to ensure the safety and security of infrastructure at offices, factories and residential buildings is aiding industry participants. Also, with rising instances of hacking, the industry is seeing higher demand for Internet security products and services like firewalls, intrusion detection systems and intrusion prevention systems. People’s preference for purchasing products through e-commerce platforms also opened up opportunities for industry players.
Other Favorable Trends: Increases in budgets and funds from governments have invited several big players to make significant investments in the research and development of advanced products and services. Government and law enforcement agencies in the United States and Canada are directly working with industry participants to strengthen the security infrastructure of smart cities.
High Debt Levels: Industry participants constantly focus on innovation, product upgrades and the development of new products to cater to the changing customer needs and stay competitive, making steady investments necessary. While this augurs well for the industry’s long-term growth, hefty investments in research and development often leave companies with highly leveraged balance sheets. The industry’s long-term debt/capital ratio is currently 0.62, higher than 0.29 of the Zacks S&P 500 composite index.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Security and Safety Services industry, housed within the broader Industrial Products sector, currently carries a Zacks Industry Rank #88. This rank places it in the top 35% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates robust near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
We will present a few stocks from the industry that you may want to consider for your portfolio. But before that, it is worth taking a look at the industry’s shareholder returns and its current valuation first.
Industry Underperforms Sector & S&P 500
The Zacks Security and Safety Services industry has underperformed both the broader sector and the Zacks S&P 500 composite index in the past year.
Over this period, the industry has moved up 0.3% compared with the sector’s and the S&P 500 Index’s increase of 4.1% and 21.3%, respectively.
Industry's Current Valuation
On the basis of forward P/E (F12M), which is a commonly used multiple for valuing security and safety services stocks, the industry is currently trading at 15.47X compared with the S&P 500’s and the sector’s 22.23X and 19.00X, respectively.
Over the past five years, the industry has traded as high as 21.71X, as low as 12.02X and at the median of 17.20X.
4 Security and Safety Services Stocks Leading the Pack
Cadre Holdings: The company is a manufacturer and distributer of safety and survivability equipment for first responders. Its core product lines include body armor, explosive ordnance disposal equipment and duty gear. In the quarter ahead, the company is poised to benefit from strong demand for its armor and duty gear products. The acquisitions of Alpha Safety and ICOR Technology also bode well for Cadre Holdings.
The Zacks Consensus Estimate for Cadre Holdings’ 2024 earnings has remained steady in the past 60 days. Shares of the Zacks Rank #2 (Buy) company have gained 4.2% in the year-to-date period. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here..
Allegion: The Dublin, Ireland-based company is a leading provider of mechanical and electronic security products, including doors and door systems, electronic security products and biometric and mobile access control systems. It is well-positioned to benefit from strength in its Americas and International segments, driven by an increase in demand for electronic security products. Increased adoption of advanced technologies and solutions in the electronics security products market, such as wireless locks and mobile-enabled smart locks, is expected to drive ALLE’s performance in the quarters ahead.
In the past 60 days, estimates for this Zacks Rank #2 company’s earnings have increased 1.3% for 2025. Its shares have gained 0.4% in the past year.
Life360: Based in San Mateo, CA, the company is engaged in offering location tracking, safety features and emergency services through its app. It also offers tile hardware devices to track lost items. The company is poised to gain from growth in monthly active users, driven by an increasing number of new members. Also, Life360’s investments in new business strategies bode well.
The Zacks Consensus Estimate for the company’s 2025 earnings has been revised upward by 6.3% in the past 60 days. The Zacks Rank #3 (Hold) stock has surged 67.8% in the past year.
Alarm.com: Based in Tysons, VA the company is engaged in providing Internet of Things and solutions for multi-family, residential and small businesses in North America and globally. Strengthening demand for products and solutions and buyout activities have been driving its performance of late. Expanded offerings of remote video monitoring are likely to be beneficial moving ahead.
In the past 60 days, estimates for ALRM’s earnings have remained steady for 2025. This Zacks Rank #3 company reported better-than-expected results in each of the last four quarters, the average earnings surprise being 13.6%.
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Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Industry Outlook Highlights Allegion, Life360, Alarm.com and Cadre
For Immediate Release
Chicago, IL – February 26, 2025 – Today, Zacks Equity Research discusses Allegion plc (ALLE - Free Report) , Life360, Inc. (LIF - Free Report) , Alarm.com Holdings, Inc. (ALRM - Free Report) and Cadre Holdings, Inc. (CDRE - Free Report) .
Industry: Security & Safety
Link: https://www.zacks.com/commentary/2420500/4-security-safety-stocks-poised-to-gain-on-promising-industry-trends
The Zacks Security and Safety Services industry is poised for growth on the back of increasing demand for products and solutions, driven by rising awareness about the security and safety of people and infrastructure. The growing demand for cybersecurity products is also benefiting many participants within the industry.
Enhanced research and development efforts, backed by government support, augur well for the industry’s near-term prospects. Companies like Allegion plc, Life360, Inc., Alarm.com Holdings, Inc. and Cadre Holdings, Inc. are a few industry participants that may capitalize on these opportunities.
Industry Description
The Zacks Security and Safety Services industry comprises firms that provide sophisticated and interactive security solutions and related services, which are meant to be used for residential, commercial and institutional purposes. A few industry players develop electrical weapons for personal defense and military, federal, law enforcement and private security.
Some of the companies provide solutions for the recovery of stolen vehicles, wireless communication devices, equipment for the safety of facility infrastructure and employees and products for detecting hazards. A few players provide a variety of services to automobile owners and insurance companies. The industry serves customers from various end markets, including manufacturing, electronics, hospitality, education, construction, telecommunications, aerospace and medical.
3 Security & Safety Services Industry Trends in Focus
Healthy Demand for Security and Safety Services: Growing instances of terrorism and criminal activities, with concerns related to the ever-increasing fraudulent activities, are promoting demand for security and safety services. To enhance the safety and surveillance of people or assets, governments, commercial operations, communities and other establishments across the world are rapidly deploying IP-based cameras.
This is acting as a key growth driver for the industry. With growing urbanization, the increasing requirement to ensure the safety and security of infrastructure at offices, factories and residential buildings is aiding industry participants. Also, with rising instances of hacking, the industry is seeing higher demand for Internet security products and services like firewalls, intrusion detection systems and intrusion prevention systems. People’s preference for purchasing products through e-commerce platforms also opened up opportunities for industry players.
Other Favorable Trends: Increases in budgets and funds from governments have invited several big players to make significant investments in the research and development of advanced products and services. Government and law enforcement agencies in the United States and Canada are directly working with industry participants to strengthen the security infrastructure of smart cities.
High Debt Levels: Industry participants constantly focus on innovation, product upgrades and the development of new products to cater to the changing customer needs and stay competitive, making steady investments necessary. While this augurs well for the industry’s long-term growth, hefty investments in research and development often leave companies with highly leveraged balance sheets. The industry’s long-term debt/capital ratio is currently 0.62, higher than 0.29 of the Zacks S&P 500 composite index.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Security and Safety Services industry, housed within the broader Industrial Products sector, currently carries a Zacks Industry Rank #88. This rank places it in the top 35% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates robust near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
We will present a few stocks from the industry that you may want to consider for your portfolio. But before that, it is worth taking a look at the industry’s shareholder returns and its current valuation first.
Industry Underperforms Sector & S&P 500
The Zacks Security and Safety Services industry has underperformed both the broader sector and the Zacks S&P 500 composite index in the past year.
Over this period, the industry has moved up 0.3% compared with the sector’s and the S&P 500 Index’s increase of 4.1% and 21.3%, respectively.
Industry's Current Valuation
On the basis of forward P/E (F12M), which is a commonly used multiple for valuing security and safety services stocks, the industry is currently trading at 15.47X compared with the S&P 500’s and the sector’s 22.23X and 19.00X, respectively.
Over the past five years, the industry has traded as high as 21.71X, as low as 12.02X and at the median of 17.20X.
4 Security and Safety Services Stocks Leading the Pack
Cadre Holdings: The company is a manufacturer and distributer of safety and survivability equipment for first responders. Its core product lines include body armor, explosive ordnance disposal equipment and duty gear. In the quarter ahead, the company is poised to benefit from strong demand for its armor and duty gear products. The acquisitions of Alpha Safety and ICOR Technology also bode well for Cadre Holdings.
The Zacks Consensus Estimate for Cadre Holdings’ 2024 earnings has remained steady in the past 60 days. Shares of the Zacks Rank #2 (Buy) company have gained 4.2% in the year-to-date period. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here..
Allegion: The Dublin, Ireland-based company is a leading provider of mechanical and electronic security products, including doors and door systems, electronic security products and biometric and mobile access control systems. It is well-positioned to benefit from strength in its Americas and International segments, driven by an increase in demand for electronic security products. Increased adoption of advanced technologies and solutions in the electronics security products market, such as wireless locks and mobile-enabled smart locks, is expected to drive ALLE’s performance in the quarters ahead.
In the past 60 days, estimates for this Zacks Rank #2 company’s earnings have increased 1.3% for 2025. Its shares have gained 0.4% in the past year.
Life360: Based in San Mateo, CA, the company is engaged in offering location tracking, safety features and emergency services through its app. It also offers tile hardware devices to track lost items. The company is poised to gain from growth in monthly active users, driven by an increasing number of new members. Also, Life360’s investments in new business strategies bode well.
The Zacks Consensus Estimate for the company’s 2025 earnings has been revised upward by 6.3% in the past 60 days. The Zacks Rank #3 (Hold) stock has surged 67.8% in the past year.
Alarm.com: Based in Tysons, VA the company is engaged in providing Internet of Things and solutions for multi-family, residential and small businesses in North America and globally. Strengthening demand for products and solutions and buyout activities have been driving its performance of late. Expanded offerings of remote video monitoring are likely to be beneficial moving ahead.
In the past 60 days, estimates for ALRM’s earnings have remained steady for 2025. This Zacks Rank #3 company reported better-than-expected results in each of the last four quarters, the average earnings surprise being 13.6%.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.