Chicago, IL – May 20, 2025 – Today, Zacks Equity Research discusses Allegion plc ALLE, MSA Safety Inc. MSA, Life360, Inc. LIF and Alarm.com Holdings, Inc. ALRM.
Link: https://www.zacks.com/commentary/2473730/4-security-safety-stocks-to-consider-on-promising-industry-trends
The Zacks Security and Safety Services industry is well-positioned to gain from the solid demand for products and solutions, driven by rising awareness about the security and safety of people and infrastructure. Enhanced research and development efforts, backed by government support, augur well for the industry's near-term prospects.
The growing demand for cybersecurity products is also benefiting several participants within the industry. Companies like Allegion plc, MSA Safety Inc., Life360, Inc. and Alarm.com Holdings, Inc. are a few industry players that may capitalize on these opportunities.
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.
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 0.28 of the Zacks S&P 500 composite index.
The Zacks Security and Safety Services industry, housed within the broader Industrial Products sector, currently carries a Zacks Industry Rank #94. This rank places it in the top 38% of 245 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.
The Zacks Security and Safety Services industry has underperformed the S&P 500 composite index and outperformed the broader Industrial Products sector.
Over this period, the industry has returned 7.7% compared with the S&P 500 Index's growth of 12% and against the sector's 1.9% decline.
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 16.56X compared with the S&P 500's and the sector's 21.88X and 19.35X, respectively.
Over the past five years, the industry has traded as high as 21.79X, as low as 14.05X and at the median of 16.97X.
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 subscribers, driven by improved retention rate and increased demand for its core family safety services. 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 9.1% in the past 60 days. This Zacks Rank #1 (Strong Buy) stock has surged 42.7% in the past six months. You can see the complete list of today's Zacks #1 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 Allegion Americas segment, driven by an increase in demand for non-residential products across end markets like education, hospitality and retail. An increase in demand for electronic security products, driven by growing awareness about the security and safety of people and infrastructure, is expected to drive ALLE's performance in the quarters ahead.
In the past 60 days, estimates for this Zacks Rank #3 (Hold) company's earnings have increased 0.5% for 2025. Allegion's shares have gained 4.4% in the past six months.
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. The company is benefiting from strong momentum in the Software as a Service and license businesses. Also, Alarm's expansion into advanced AI-powered solutions and a strategic partnership in the EV space is likely to be beneficial moving ahead.
In the past 60 days, estimates for ALRM's earnings have increased 0.4% for 2025. This Zacks Rank #3 company reported better-than-expected results in each of the last four quarters, the average earnings surprise being 15.7%.
MSA Safety: The company is engaged in the development, manufacture and supply of safety products that protect people and facility infrastructures. Its core products include self-contained breathing apparatus, fixed gas and flame detection systems, air-purifying respirators and gas masks, among others. Strengthening demand for its detection and industrial PPE products has been driving the company's performance of late. A favorable product mix and stable order trends are likely to be beneficial moving ahead.
The company's earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 3%. Shares of this Zacks Rank #3 company gained 12% in the past month.
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Allegion PLC (ALLE) : Free Stock Analysis Report
MSA Safety Incorporporated (MSA) : Free Stock Analysis Report
Alarm.com Holdings, Inc. (ALRM) : Free Stock Analysis Report
Life360, Inc. (LIF) : Free Stock Analysis Report
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