ADT INC (ADT) Stock Fundamental Analysis
USA - NYSE:ADT - US00090Q1031 - Common Stock
8.16 USD
+0.04 (+0.49%)
8.16 USD
0 (0%)
ADT gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 78 industry peers in the Diversified Consumer Services industry. While ADT belongs to the best of the industry regarding profitability, there are concerns on its financial health. ADT may be a bit undervalued, certainly considering the very reasonable score on growth
1. Profitability
1.1 Basic Checks
In the past year ADT was profitable.
ADT had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: ADT reported negative net income in multiple years.
In the past 5 years ADT always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.90%, ADT is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
Looking at the Return On Equity, with a value of 17.01%, ADT belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
The Return On Invested Capital of ADT (7.00%) is better than 74.36% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ADT is below the industry average of 9.50%.
The 3 year average ROIC (5.35%) for ADT is below the current ROIC(7.00%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.9% | ||
| ROE | 17.01% | ||
| ROIC | 7% |
ROA(3y)2.26%
ROA(5y)0.17%
ROE(3y)9.77%
ROE(5y)-0.4%
ROIC(3y)5.35%
ROIC(5y)3.49%
1.3 Margins
The Profit Margin of ADT (12.31%) is better than 74.36% of its industry peers.
Looking at the Operating Margin, with a value of 25.77%, ADT belongs to the top of the industry, outperforming 94.87% of the companies in the same industry.
In the last couple of years the Operating Margin of ADT has grown nicely.
ADT has a better Gross Margin (81.28%) than 94.87% of its industry peers.
ADT's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.77% | ||
| PM (TTM) | 12.31% | ||
| GM | 81.28% |
OM growth 3Y192.77%
OM growth 5Y30.57%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y5.32%
GM growth 5Y2.56%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ADT is destroying value.
Compared to 1 year ago, ADT has less shares outstanding
Compared to 5 years ago, ADT has more shares outstanding
The debt/assets ratio for ADT has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.56, we must say that ADT is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.56, ADT is in line with its industry, outperforming 44.87% of the companies in the same industry.
ADT has a debt to FCF ratio of 10.80. This is a negative value and a sign of low solvency as ADT would need 10.80 years to pay back of all of its debts.
ADT has a better Debt to FCF ratio (10.80) than 64.10% of its industry peers.
ADT has a Debt/Equity ratio of 1.84. This is a high value indicating a heavy dependency on external financing.
ADT's Debt to Equity ratio of 1.84 is on the low side compared to the rest of the industry. ADT is outperformed by 67.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.84 | ||
| Debt/FCF | 10.8 | ||
| Altman-Z | 0.56 |
ROIC/WACC0.98
WACC7.12%
2.3 Liquidity
ADT has a Current Ratio of 0.46. This is a bad value and indicates that ADT is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.46, ADT is not doing good in the industry: 83.33% of the companies in the same industry are doing better.
ADT has a Quick Ratio of 0.46. This is a bad value and indicates that ADT is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.37, ADT is not doing good in the industry: 84.62% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.46 | ||
| Quick Ratio | 0.37 |
3. Growth
3.1 Past
ADT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.54%, which is quite good.
ADT shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.53% yearly.
ADT shows a small growth in Revenue. In the last year, the Revenue has grown by 5.28%.
The Revenue has been decreasing by -0.90% on average over the past years.
EPS 1Y (TTM)11.54%
EPS 3Y93.99%
EPS 5Y-7.53%
EPS Q2Q%15%
Revenue 1Y (TTM)5.28%
Revenue growth 3Y-2.64%
Revenue growth 5Y-0.9%
Sales Q2Q%4.34%
3.2 Future
ADT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.93% yearly.
Based on estimates for the next years, ADT will show a small growth in Revenue. The Revenue will grow by 4.73% on average per year.
EPS Next Y20.2%
EPS Next 2Y16.77%
EPS Next 3Y15.93%
EPS Next 5YN/A
Revenue Next Year5.43%
Revenue Next 2Y4.91%
Revenue Next 3Y4.73%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
ADT is valuated reasonably with a Price/Earnings ratio of 9.38.
Based on the Price/Earnings ratio, ADT is valued cheaply inside the industry as 89.74% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 25.67. ADT is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 8.20, the valuation of ADT can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ADT indicates a rather cheap valuation: ADT is cheaper than 93.59% of the companies listed in the same industry.
ADT's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 31.86.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.38 | ||
| Fwd PE | 8.2 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ADT indicates a rather cheap valuation: ADT is cheaper than 87.18% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, ADT is valued cheaper than 92.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.37 | ||
| EV/EBITDA | 5.46 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ADT has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as ADT's earnings are expected to grow with 15.93% in the coming years.
PEG (NY)0.46
PEG (5Y)N/A
EPS Next 2Y16.77%
EPS Next 3Y15.93%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.71%, ADT has a reasonable but not impressive dividend return.
ADT's Dividend Yield is rather good when compared to the industry average which is at 2.04. ADT pays more dividend than 96.15% of the companies in the same industry.
ADT's Dividend Yield is comparable with the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.71% |
5.2 History
The dividend of ADT decreases each year by -23.00%.
ADT has been paying a dividend for at least 10 years, so it has a reliable track record.
ADT has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-23%
Div Incr Years1
Div Non Decr Years4
5.3 Sustainability
31.50% of the earnings are spent on dividend by ADT. This is a low number and sustainable payout ratio.
DP31.5%
EPS Next 2Y16.77%
EPS Next 3Y15.93%
8.16
+0.04 (+0.49%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners77.69%
Inst Owner Change0.33%
Ins Owners1.32%
Ins Owner Change-3.55%
Market Cap6.78B
Revenue(TTM)4.90B
Net Income(TTM)622.53M
Analysts75.56
Price Target9.77 (19.73%)
Short Float %3.91%
Short Ratio3.01
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.71% |
Yearly Dividend0.2
Dividend Growth(5Y)-23%
DP31.5%
Div Incr Years1
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)11.59%
Min EPS beat(2)9.32%
Max EPS beat(2)13.86%
EPS beat(4)4
Avg EPS beat(4)11.08%
Min EPS beat(4)5.33%
Max EPS beat(4)15.8%
EPS beat(8)7
Avg EPS beat(8)115.18%
EPS beat(12)10
Avg EPS beat(12)93.1%
EPS beat(16)10
Avg EPS beat(16)40.77%
Revenue beat(2)1
Avg Revenue beat(2)0.36%
Min Revenue beat(2)-0.16%
Max Revenue beat(2)0.88%
Revenue beat(4)3
Avg Revenue beat(4)0.62%
Min Revenue beat(4)-0.16%
Max Revenue beat(4)1.12%
Revenue beat(8)4
Avg Revenue beat(8)-4.61%
Revenue beat(12)5
Avg Revenue beat(12)-5.34%
Revenue beat(16)7
Avg Revenue beat(16)-6.01%
PT rev (1m)0%
PT rev (3m)3.68%
EPS NQ rev (1m)-0.56%
EPS NQ rev (3m)0.19%
EPS NY rev (1m)-0.14%
EPS NY rev (3m)3.42%
Revenue NQ rev (1m)0.15%
Revenue NQ rev (3m)0.08%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.38 | ||
| Fwd PE | 8.2 | ||
| P/S | 1.34 | ||
| P/FCF | 9.37 | ||
| P/OCF | 3.41 | ||
| P/B | 1.85 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.46 |
EPS(TTM)0.87
EY10.66%
EPS(NY)1
Fwd EY12.2%
FCF(TTM)0.87
FCFY10.67%
OCF(TTM)2.39
OCFY29.31%
SpS6.09
BVpS4.4
TBVpS-7.36
PEG (NY)0.46
PEG (5Y)N/A
Graham Number9.28
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.9% | ||
| ROE | 17.01% | ||
| ROCE | 9.36% | ||
| ROIC | 7% | ||
| ROICexc | 7.02% | ||
| ROICexgc | 23.78% | ||
| OM | 25.77% | ||
| PM (TTM) | 12.31% | ||
| GM | 81.28% | ||
| FCFM | 14.31% |
ROA(3y)2.26%
ROA(5y)0.17%
ROE(3y)9.77%
ROE(5y)-0.4%
ROIC(3y)5.35%
ROIC(5y)3.49%
ROICexc(3y)5.39%
ROICexc(5y)3.51%
ROICexgc(3y)17.14%
ROICexgc(5y)11.43%
ROCE(3y)7.17%
ROCE(5y)4.67%
ROICexgc growth 3Y161.56%
ROICexgc growth 5Y19.28%
ROICexc growth 3Y188.1%
ROICexc growth 5Y29.78%
OM growth 3Y192.77%
OM growth 5Y30.57%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y5.32%
GM growth 5Y2.56%
F-Score6
Asset Turnover0.32
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.84 | ||
| Debt/FCF | 10.8 | ||
| Debt/EBITDA | 2.54 | ||
| Cap/Depr | 93.37% | ||
| Cap/Sales | 25% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 74.81% | ||
| Profit Quality | 116.28% | ||
| Current Ratio | 0.46 | ||
| Quick Ratio | 0.37 | ||
| Altman-Z | 0.56 |
F-Score6
WACC7.12%
ROIC/WACC0.98
Cap/Depr(3y)95.22%
Cap/Depr(5y)83.19%
Cap/Sales(3y)26.65%
Cap/Sales(5y)25.38%
Profit Quality(3y)148.75%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)11.54%
EPS 3Y93.99%
EPS 5Y-7.53%
EPS Q2Q%15%
EPS Next Y20.2%
EPS Next 2Y16.77%
EPS Next 3Y15.93%
EPS Next 5YN/A
Revenue 1Y (TTM)5.28%
Revenue growth 3Y-2.64%
Revenue growth 5Y-0.9%
Sales Q2Q%4.34%
Revenue Next Year5.43%
Revenue Next 2Y4.91%
Revenue Next 3Y4.73%
Revenue Next 5YN/A
EBIT growth 1Y13.89%
EBIT growth 3Y185.05%
EBIT growth 5Y29.39%
EBIT Next Year118%
EBIT Next 3Y34.02%
EBIT Next 5Y25.29%
FCF growth 1Y51.53%
FCF growth 3Y76.31%
FCF growth 5Y4.03%
OCF growth 1Y6.63%
OCF growth 3Y4.54%
OCF growth 5Y0.13%
ADT INC / ADT FAQ
Can you provide the ChartMill fundamental rating for ADT INC?
ChartMill assigns a fundamental rating of 5 / 10 to ADT.
What is the valuation status of ADT INC (ADT) stock?
ChartMill assigns a valuation rating of 9 / 10 to ADT INC (ADT). This can be considered as Undervalued.
Can you provide the profitability details for ADT INC?
ADT INC (ADT) has a profitability rating of 7 / 10.
Can you provide the financial health for ADT stock?
The financial health rating of ADT INC (ADT) is 2 / 10.
What is the earnings growth outlook for ADT INC?
The Earnings per Share (EPS) of ADT INC (ADT) is expected to grow by 20.2% in the next year.