SmartRent, Inc. (SMRT) DCF Valuation & Fundamental Primer
SmartRent, Inc. (SMRT) trades at $1.73 with a market enterprise value of $240.2M and generated $151.2M in TTM revenue and -$1.1M in free cash flow (filed 2026-08-05 (period ended 2026-06-30)). Our 5-year DCF model estimates an implied intrinsic value of $0.39 per diluted share (Grade: C · 46/100 · Capital Intensive / Low Margin).
SEC 10-K/10-Q DCF teardown of SmartRent, Inc. (SMRT): $151.2M TTM revenue (8.3% growth), 39.9% GAAP gross margin, -0.7% FCF margin, 6.7% SBC/revenue, and R&D Return Grade D (Faders, $-0.36 new gross profit per $1 prior R&D).
SmartRent, Inc. (SMRT) earns a "Pass" rating and an institutional Quality Score of 46/100 (Grade C). On $151.2M in baseline revenue (8.3% growth, 39.9% gross margin, -0.7% FCF margin), our 5-year DCF yields an Enterprise Value of -$18.4M ($0.39/share vs. $1.73 market price). On the R&D Return Benchmark, SMRT ranks #168 of 174 (Faders · Grade D, -0.36× return).
Gross Margin & Unit Economics: SmartRent, Inc. operates at a 39.9% gross margin on $151.2M revenue (32.8 pts below the Software - Application median of 72.7%).
R&D Productivity (Faders · Grade D): Investing 17.2% of revenue in R&D ($26.2M) generates $-0.36 of incremental gross profit per R&D dollar (Rank #168 of 174).
Rule of 40 & Cash Conversion: Combining 8.3% top-line growth with -0.7% FCF margin yields a 7.6% Rule of 40 score (vs. 47.2% cohort median) and -$18.4M DCF Enterprise Value.
3-Statement Financial Schedule & 5-Year Horizon
Synchronized directly with the 3-Year Operating Statement (39.9% Gross Margin · 8.3% Growth)
| Income Statement Line | Year 1 (2026) | Year 2 (2027) | Year 3 (2028) |
|---|---|---|---|
| Revenue | $151.2M | $163.8M | $177.4M |
| Cost of Revenue (COGS) | ($90.9M) | ($97.6M) | ($104.8M) |
| Gross Profit & Margin | $60.3M (39.9%) | $66.2M (40.4%) | $72.6M (40.9%) |
| Research & Development (R&D) | $23.2M | $24.2M | $25.1M |
| Sales & Marketing (S&M) | $43.0M | $44.7M | $46.4M |
| General & Administrative (G&A) | $16.7M | $17.4M | $18.0M |
| Operating EBIT | -$22.6M (-14.9%) | -$20.0M (-12.2%) | -$16.9M (-9.5%) |
| Adjusted EBITDA | -$13.6M (-9.0%) | -$10.3M (-6.3%) | -$6.4M (-3.6%) |
3 Key Underwriting Risks
Structural sensitivities monitored in the 3-Statement Financial Engine
Value-Creation Levers · Quantified Statement Impact
Apply any lever below to write its operating assumptions directly into the 3-Statement Model
Automate cloud hosting & support workflows to lift gross margin from 39.9% to 44.9%.
Align R&D intensity and ASC 350-40 capitalization to the R&D Compounders cohort median, recapturing $3.0M in annual EBITDA.
Lift net dollar retention and expansion velocity by +300 bps, compounding Year 3 revenue to $187.4M.
SmartRent, Inc. (SMRT) 3-Scenario DCF Valuation Range
Stress-test SMRT's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Simulate how deploying Gemini workflow automation and autonomous engineering expands SMRT's Gross Margin, FCF Margin, DCF share price, and 2x2 R&D Return Quadrant.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $1.73).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $2.00 +16% | $2.09 +21% | $2.20 +27% | $2.33 +35% | $2.48 +44% |
| 9.3% | $1.85 +7% | $1.92 +11% | $2.01 +16% | $2.10 +22% | $2.22 +28% |
| 10.0% | $1.72 -0% | $1.78 +3% | $1.85 +7% | $1.93 +11% | $2.01 +16% |
| 10.8% | $1.62 -6% | $1.67 -4% | $1.72 -0% | $1.78 +3% | $1.85 +7% |
| 11.5% | $1.53 -11% | $1.57 -9% | $1.62 -7% | $1.67 -4% | $1.72 -1% |
Institutional Software Quality Scorecard (46/100 · Grade C)
Weak cash conversion, substantial dilution drag, or constrained financial flexibility.
Negative free cash flow; business consumes cash to sustain operations
Disciplined equity compensation well below software industry average
Sub-par gross margins; higher cost of delivery or hardware/services mix
Moderate leverage or cash burn; monitor liquidity runway
Core Investment Strengths & Moats
Key Operational & Dilution Risks
- Negative free cash flow burn of -$1.1M over trailing twelve months
- Lower software gross margins (39.9%), indicating higher hosting or service delivery drag
Audited R&D Intensity is 17.2% of revenue with a -0.36× incremental gross profit return per R&D dollar. Under your current Stage 1 (8.3% CAGR / 39.9% GM) assumptions, SMRT projects to 0.61× R&D Return (Grade BBB · Harvesters).
Reverse-DCF Solver: What Growth is Priced Into SMRT?
The current share price only requires -3.4% 5-year CAGR (39.3% dilution-adjusted), well below historical growth of 8.3%. If the company maintains baseline execution, there is asymmetric upside.
Headline Reverse-DCF ignores Stock-Based Compensation (6.7% of revenue) and annual share dilution (26.2%/yr). Accounting for both requires 39.3% 5-year revenue CAGR to justify $1.73/sh on a true per-share economic cash flow basis.
SmartRent, Inc. (SMRT) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $151.2M | $151.2M | $163.8M | $177.4M | $192.2M | $208.2M | $225.5M |
| Gross Profit | $60.3M | $60.3M | $65.4M | $70.8M | $76.7M | $83.1M | $90.0M |
| Operating Income (EBIT) | -$22.6M | -$22.6M | -$24.4M | -$26.5M | -$28.7M | -$31.1M | -$33.6M |
| Stock-Based Compensation (SBC) | $10.1M | $10.1M | $10.9M | $11.8M | $12.8M | $13.9M | $15.0M |
| Unlevered Free Cash Flow (FCF) | -$1.1M | -$1.1M | -$1.1M | -$1.2M | -$1.3M | -$1.5M | -$1.6M |
| SBC-Adjusted True Cash Flow | -$11.1M | -$11.1M | -$12.1M | -$13.1M | -$14.1M | -$15.3M | -$16.6M |
Software - Application Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = 6.7 + 0.05 × (Rule of 40) · R² = 12%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| SmartRent, Inc. | SMRT | $332.9M | $151.2M | 39.9% | -0.7% | 7.6% | 6.7% | 1.6× |
| Grab Holdings Limited | GRAB | $20.18B | $2.80B | 42.0% | 27.7% | 84.0% | 10.0% | 6.3× |
| Figma, Inc. | FIG | $18.07B | $749.0M | 88.3% | -9.2% | 39.1% | 126.5% | 23.5× |
| Full Truck Alliance Co. Ltd. | YMM | $71.73B | $11.24B | 86.6% | 25.8% | 70.2% | 4.4% | 5.9× |
| ServiceTitan, Inc. | TTAN | $9.97B | $771.9M | 64.9% | 2.0% | 30.5% | 21.2% | 12.5× |
| InterDigital, Inc. | IDCC | $8.65B | $868.5M | 80.5% | 30.6% | 55.3% | 5.3% | 9.9× |
| OPEN TEXT CORP | OTEX | $8.11B | $5.30B | 63.5% | 13.0% | 23.8% | 2.0% | 2.6× |
| Peer Cohort Median Benchmark (N=6) | 72.7% | 19.4% | 47.2% | 7.6% | 8.1× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 1.6× | $240.2M | $332.9M | $1.73 | 0.0% |
| -20% Multiple Compression | 1.3× | $192.2M | $284.8M | $1.48 | -20.0% |
| -35% Multiple Compression | 1.0× | $156.1M | $248.8M | $1.29 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $756.0M | $848.7M | $4.41 | +214.7% |
Frequently Asked Questions: SmartRent, Inc. (SMRT) Valuation
What is SmartRent, Inc. (SMRT)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, SmartRent, Inc. (SMRT) has a Base Case implied value of $0.39 per share (with a Bear Case of $0.43 and a Bull Case of $0.33), compared to its current price of $1.73. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is SmartRent, Inc. (SMRT)'s Rule of 40 score and Free Cash Flow margin?
SmartRent, Inc. achieves a Rule of 40 score of 7.6%, combining a 8.3% revenue growth run-rate with a -0.7% TTM free cash flow margin on $151.2M in trailing twelve-month revenue. In the Software - Application peer cohort, the median Rule of 40 benchmark is 47.2%.
What revenue growth rate is priced into SMRT stock according to Reverse-DCF analysis?
At $1.73 per share (Enterprise Value of $240.2M), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of -3.4%, compared to SmartRent, Inc.'s historical CAGR of 8.3%. Overall market expectations are rated as "Substantial Margin of Safety".
What is SmartRent, Inc. (SMRT)'s R&D Return Score and innovation productivity?
On the Golden Door Software R&D Return Benchmark, SmartRent, Inc. (SMRT) is ranked #168 out of 174 scored software peers, earning a Grade D in the "Faders" quadrant. SmartRent, Inc. invests 17.2% of FY revenue into R&D ($26.2M) and generated $-0.36 of incremental gross profit per prior-year R&D dollar.
How does SmartRent, Inc. compare to Software - Application peers?
SmartRent, Inc. (SMRT) earns an institutional Software Quality Score of 46/100 (Grade C — Capital Intensive / Low Margin). Across its Software - Application peer group (GRAB, FIG, YMM, TTAN, IDCC), the cohort trades at a median EV/TTM Revenue multiple of 8.1× and a median gross margin of 72.7%.
How does Stock-Based Compensation (SBC) impact SmartRent, Inc. (SMRT)'s valuation?
SmartRent, Inc. recorded $10.1M in TTM stock-based compensation (6.7% of revenue). When treating SBC as a cash-equivalent compensation expense, SmartRent, Inc.'s SBC-adjusted free cash flow yield is -3.3%, scoring 21/25 on our Shareholder Dilution Friction pillar.