ADT INC (ADT) Stock Fundamental Analysis
USA - NYSE:ADT - US00090Q1031 - Common Stock
8.31 USD
+0.19 (+2.34%)
8.32 USD
+0.01 (+0.12%)
We assign a fundamental rating of 5 out of 10 to ADT. ADT was compared to 78 industry peers in the Diversified Consumer Services industry. While ADT has a great profitability rating, there are quite some concerns on its financial health. ADT is valued quite cheap, while showing a decent growth score. This is a good combination!
1. Profitability
1.1 Basic Checks
ADT had positive earnings in the past year.
ADT had a positive operating cash flow in the past year.
In multiple years ADT reported negative net income over the last 5 years.
Each year in the past 5 years ADT had a positive operating cash flow.
1.2 Ratios
ADT has a Return On Assets of 3.89%. This is in the better half of the industry: ADT outperforms 66.67% of its industry peers.
ADT has a better Return On Equity (17.00%) than 83.33% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.99%, ADT is in the better half of the industry, outperforming 74.36% of the companies in the same industry.
ADT had an Average Return On Invested Capital over the past 3 years of 5.35%. This is below the industry average of 9.31%.
The 3 year average ROIC (5.35%) for ADT is below the current ROIC(6.99%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.89% | ||
| ROE | 17% | ||
| ROIC | 6.99% |
ROA(3y)2.26%
ROA(5y)0.17%
ROE(3y)9.77%
ROE(5y)-0.4%
ROIC(3y)5.35%
ROIC(5y)3.48%
1.3 Margins
ADT's Profit Margin of 12.30% is fine compared to the rest of the industry. ADT outperforms 74.36% of its industry peers.
With an excellent Operating Margin value of 25.78%, ADT belongs to the best of the industry, outperforming 94.87% of the companies in the same industry.
ADT's Operating Margin has improved in the last couple of years.
The Gross Margin of ADT (81.28%) is better than 94.87% of its industry peers.
In the last couple of years the Gross Margin of ADT has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.78% | ||
| PM (TTM) | 12.3% | ||
| GM | 81.28% |
OM growth 3Y192.75%
OM growth 5Y30.56%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y5.32%
GM growth 5Y2.56%
2. Health
2.1 Basic Checks
ADT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
ADT has less shares outstanding than it did 1 year ago.
ADT has more shares outstanding than it did 5 years ago.
The debt/assets ratio for ADT has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.57, we must say that ADT is in the distress zone and has some risk of bankruptcy.
ADT has a Altman-Z score (0.57) which is comparable to the rest of the industry.
ADT has a debt to FCF ratio of 10.79. This is a negative value and a sign of low solvency as ADT would need 10.79 years to pay back of all of its debts.
The Debt to FCF ratio of ADT (10.79) is better than 64.10% of its industry peers.
A Debt/Equity ratio of 1.85 is on the high side and indicates that ADT has dependencies on debt financing.
With a Debt to Equity ratio value of 1.85, ADT is not doing good in the industry: 67.95% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.85 | ||
| Debt/FCF | 10.79 | ||
| Altman-Z | 0.57 |
ROIC/WACC0.97
WACC7.18%
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.
The Quick ratio of ADT (0.37) is worse than 84.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.46 | ||
| Quick Ratio | 0.37 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 11.54% over the past year.
The Earnings Per Share has been decreasing by -7.53% on average over the past years.
The Revenue has been growing slightly by 5.28% in the past year.
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
Based on estimates for the next years, ADT will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.93% on average per year.
ADT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.73% yearly.
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 9.55, the valuation of ADT can be described as very reasonable.
Based on the Price/Earnings ratio, ADT is valued cheaper than 88.46% of the companies in the same industry.
ADT's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.34.
ADT is valuated reasonably with a Price/Forward Earnings ratio of 8.35.
92.31% of the companies in the same industry are more expensive than ADT, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 34.43, ADT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.55 | ||
| Fwd PE | 8.35 |
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 88.46% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, ADT is valued cheaper than 91.03% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.54 | ||
| EV/EBITDA | 5.52 |
4.3 Compensation for Growth
ADT's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of ADT 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)0.47
PEG (5Y)N/A
EPS Next 2Y16.77%
EPS Next 3Y15.93%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.65%, ADT has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.07, ADT pays a better dividend. On top of this ADT pays more dividend than 96.15% of the companies listed in the same industry.
ADT's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.65% |
5.2 History
The dividend of ADT decreases each year by -23.02%.
ADT has paid a dividend for at least 10 years, which is a reliable track record.
ADT has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-23.02%
Div Incr Years1
Div Non Decr Years4
5.3 Sustainability
ADT pays out 31.51% of its income as dividend. This is a sustainable payout ratio.
DP31.51%
EPS Next 2Y16.77%
EPS Next 3Y15.93%
8.31
+0.19 (+2.34%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners77.69%
Inst Owner Change3.77%
Ins Owners1.32%
Ins Owner Change-3.54%
Market Cap6.91B
Revenue(TTM)4.90B
Net Income(TTM)622.00M
Analysts75.56
Price Target9.77 (17.57%)
Short Float %3.91%
Short Ratio3.01
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.65% |
Yearly Dividend0.2
Dividend Growth(5Y)-23.02%
DP31.51%
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)2.13%
EPS NQ rev (1m)-0.56%
EPS NQ rev (3m)-1.83%
EPS NY rev (1m)-0.4%
EPS NY rev (3m)3.15%
Revenue NQ rev (1m)0.15%
Revenue NQ rev (3m)0.31%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)-0.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.55 | ||
| Fwd PE | 8.35 | ||
| P/S | 1.37 | ||
| P/FCF | 9.54 | ||
| P/OCF | 3.47 | ||
| P/B | 1.89 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.52 |
EPS(TTM)0.87
EY10.47%
EPS(NY)1
Fwd EY11.98%
FCF(TTM)0.87
FCFY10.48%
OCF(TTM)2.39
OCFY28.79%
SpS6.09
BVpS4.4
TBVpS-7.36
PEG (NY)0.47
PEG (5Y)N/A
Graham Number9.28
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.89% | ||
| ROE | 17% | ||
| ROCE | 9.37% | ||
| ROIC | 6.99% | ||
| ROICexc | 7.02% | ||
| ROICexgc | 23.78% | ||
| OM | 25.78% | ||
| PM (TTM) | 12.3% | ||
| 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)3.48%
ROICexc(3y)5.39%
ROICexc(5y)3.51%
ROICexgc(3y)17.12%
ROICexgc(5y)11.42%
ROCE(3y)7.17%
ROCE(5y)4.67%
ROICexgc growth 3Y161.55%
ROICexgc growth 5Y19.28%
ROICexc growth 3Y188.08%
ROICexc growth 5Y29.78%
OM growth 3Y192.75%
OM growth 5Y30.56%
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 | 1.85 | ||
| Debt/FCF | 10.79 | ||
| Debt/EBITDA | 2.54 | ||
| Cap/Depr | 93.43% | ||
| Cap/Sales | 25.01% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 74.82% | ||
| Profit Quality | 116.4% | ||
| Current Ratio | 0.46 | ||
| Quick Ratio | 0.37 | ||
| Altman-Z | 0.57 |
F-Score6
WACC7.18%
ROIC/WACC0.97
Cap/Depr(3y)95.22%
Cap/Depr(5y)83.19%
Cap/Sales(3y)26.65%
Cap/Sales(5y)25.39%
Profit Quality(3y)148.73%
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 1Y13.96%
EBIT growth 3Y185.04%
EBIT growth 5Y29.38%
EBIT Next Year118%
EBIT Next 3Y34.02%
EBIT Next 5Y25.29%
FCF growth 1Y51.56%
FCF growth 3Y76.29%
FCF growth 5Y4.03%
OCF growth 1Y6.67%
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.