Alarm Company Valuation Calculator: How the Math Actually Works in 2026

Every online alarm company calculator I've seen makes the same mistake: it runs one formula for a business that comes in three shapes. After 23 years in this industry — building Protect America to over 800,000 accounts and over $600 million in sales, top-15 on the SDM 100 for over a decade — I can tell you buyers use exactly two formulas, and knowing which one applies to you matters more than any input you type.

Formula one prices a stream of contracted payments: a multiple of monthly RMR. Formula two prices an operating business: a multiple of EBITDA. Hybrids get both, applied to the right pieces. Get the formula assignment wrong and every number downstream is wrong.

If the asset being sold is a book of monitored accounts, the math is: monthly RMR x multiple. Verified 2026 transactions put the multiple at 30-50x, with quality commercial books at 35-45x. The buyer largely ignores your P&L — they're pricing the durability of the payment stream, which is why attrition, contract terms, account age, and density set your position inside the range.

Why do buyers pay years of revenue up front? Because building accounts is expensive: creating a new account typically takes 30-40+ months of RMR to recoup the fully loaded cost. Buying your seasoned book at 30-50x beats building the same book from zero.

If the asset being sold is a whole company — crews, contracts, brand, management — buyers price a multiple of EBITDA, and the multiple depends on what kind of company it is. Verified 2026 data: project-heavy shops at $1-3M revenue sell at roughly 3-5x EBITDA. Regional companies with a real management team and 35-50% recurring revenue sell at roughly 5-9x, reaching 7-8x and above once recurring passes 40-50% of revenue.

The spread between those tiers is the recurring-revenue effect: verified 2026 data shows recurring mix is worth roughly 2-3 full EBITDA turns. Not double the multiple — that claim is folklore — but two to three whole turns, which on a million dollars of EBITDA is two to three million dollars.

• ▸Selling only your monitoring accounts? RMR formula: monthly RMR x 30-50.
• ▸Project and install revenue dominates, recurring is thin, revenue $1-3M? EBITDA formula at roughly 3-5x.
• ▸Regional operation, management team in place, recurring at 35-50% of revenue? EBITDA formula at roughly 5-9x.
• ▸Meaningful install business AND a meaningful monitoring book? You're a hybrid — both formulas, applied separately, then summed or visibly blended.

Most independent dealers are hybrids, which is exactly why most one-formula calculators mislead them — usually in the buyer's favor.

Say your book produces $40,000 in collected monthly RMR. At the verified 30-50x range, the book prices between $1.2 million and $2.0 million. If it's a quality commercial book — contracted, dense, attrition under 10% — the 35-45x band applies: $1.4 million to $1.8 million. That $600,000 spread inside the full range is what attrition history, contract strength, and clean records are worth.

Now take an install shop doing $2.5 million in revenue with $400,000 of EBITDA and only a token amount of recurring revenue. This is a tuck-in, priced at roughly 3-5x EBITDA: $1.2 million to $2.0 million. Notice something uncomfortable: the $40,000 monitoring book in example one — a far smaller operation — prices in the same neighborhood as this whole company. That's the market telling you what it values.

Here's where sellers lose real money. Take a hybrid: an install division earning $400,000 of EBITDA, plus a monitoring book producing $50,000 of monthly RMR. Watch what happens under two different calculations.

Same company, dramatically different outcomes. The blend trap is the buyer absorbing your monitoring book into one EBITDA number and underpaying the RMR-heavy side. The defense is simple: price the pieces separately, and make any blended number prove it reflects both.

The formula gets you a range. Where you land inside it is set by things a spreadsheet can't measure from four inputs:

• ▸Attrition — industry-typical is roughly 10-13% annually; under 10% earns premium pricing in every formula.
• ▸Contract quality — signed, current, assignable agreements versus a drawer of handshakes.
• ▸Management depth — a company that runs without the owner is worth more than one that is the owner.
• ▸Customer concentration — one account that's 20% of revenue is a discount waiting to be applied.
• ▸Record cleanliness — books that reconcile in diligence keep their price; books that don't, don't.

Most free calculators exist to generate listings, so they lean on multiple tiers far above anything in closed-transaction data. Run your numbers through an inflated chart and you'll anchor on a price no buyer will pay — then real offers feel insulting and good deals die. Calculate against verified ranges instead, and treat any output above them as a marketing document, not a valuation.

Here's the real use of a valuation calculation: not to admire the number, but to change it. Every input is a lever. Shift revenue mix toward recurring and you add turns. Cut attrition under 10% and you climb the RMR range. Build a management layer and you exit the tuck-in tier. The owners who run this math three years before selling walk into negotiations with a different company than the one they would have sold.