Over the past six months, SmartRent’s stock price fell to $1.36. Shareholders have lost 6.3% of their capital, which is disappointing considering the S&P 500 has climbed by 3.4%. This might have investors contemplating their next move.
Is there a buying opportunity in SmartRent, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Is SmartRent Not Exciting?
Even with the cheaper entry price, we're swiping left on SmartRent for now. Here are three reasons we avoid SMRT and a stock we'd rather own.
1. Revenue Tumbling Downwards
Long-term growth is the most important, but within industrials, a stretched historical view may miss new industry trends or demand cycles. SmartRent’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 19.8% over the last two years.
2. EPS Stalling Over the Last Two Years
Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.
For SmartRent, EPS didn’t budge over the last two years, a regression from its four-year trend. We hope it can revert to earnings growth in the coming years.
3. Cash Burn Ignites Concerns
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
While SmartRent posted positive free cash flow this quarter, the broader story hasn’t been so clean. SmartRent’s demanding reinvestments have drained its resources over the last five years, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 24.3%, meaning it lit $24.30 of cash on fire for every $100 in revenue.
Final Judgment
SmartRent isn’t a terrible business, but it doesn’t pass our bar. Following the recent decline, the stock trades at 104.5× forward EV-to-EBITDA (or $1.36 per share). This valuation tells us it’s a bit of a market darling with a lot of good news priced in - we think there are better opportunities elsewhere. Let us point you toward a top digital advertising platform riding the creator economy.
Stocks We Would Buy Instead of SmartRent
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
