ADT INC (ADT) Stock Fundamental Analysis
NYSE:ADT - New York Stock Exchange, Inc. - US00090Q1031 - Common Stock - Currency: USD
ADT gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 71 industry peers in the Diversified Consumer Services industry. ADT scores excellent on profitability, but there are concerns on its financial health. ADT has a bad growth rate and is valued cheaply. Finally ADT also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year ADT was profitable.
ADT had a positive operating cash flow in the past year.
In multiple years ADT reported negative net income over the last 5 years.
In the past 5 years ADT always reported a positive cash flow from operatings.
1.2 Ratios
ADT has a better Return On Assets (5.51%) than 75.00% of its industry peers.
The Return On Equity of ADT (22.76%) is better than 85.94% of its industry peers.
ADT's Return On Invested Capital of 5.97% is fine compared to the rest of the industry. ADT outperforms 71.88% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ADT is significantly below the industry average of 12.02%.
The last Return On Invested Capital (5.97%) for ADT is above the 3 year average (3.10%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.51% | ||
| ROE | 22.76% | ||
| ROIC | 5.97% |
ROA(3y)0.54%
ROA(5y)-0.99%
ROE(3y)1.88%
ROE(5y)-5.7%
ROIC(3y)3.1%
ROIC(5y)2.41%
1.3 Margins
ADT's Profit Margin of 18.25% is amongst the best of the industry. ADT outperforms 92.19% of its industry peers.
ADT has a better Operating Margin (24.70%) than 95.31% of its industry peers.
In the last couple of years the Operating Margin of ADT has grown nicely.
With an excellent Gross Margin value of 82.68%, ADT belongs to the best of the industry, outperforming 93.75% of the companies in the same industry.
In the last couple of years the Gross Margin of ADT has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.7% | ||
| PM (TTM) | 18.25% | ||
| GM | 82.68% |
OM growth 3Y73.95%
OM growth 5Y22.41%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y3.73%
GM growth 5Y0.64%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ADT is destroying value.
The number of shares outstanding for ADT has been increased compared to 1 year ago.
Compared to 5 years ago, ADT has more shares outstanding
ADT has a better debt/assets ratio than last year.
2.2 Solvency
ADT has an Altman-Z score of 0.56. This is a bad value and indicates that ADT is not financially healthy and even has some risk of bankruptcy.
ADT has a Altman-Z score of 0.56. This is comparable to the rest of the industry: ADT outperforms 43.75% of its industry peers.
ADT has a debt to FCF ratio of 18.02. This is a negative value and a sign of low solvency as ADT would need 18.02 years to pay back of all of its debts.
ADT's Debt to FCF ratio of 18.02 is in line compared to the rest of the industry. ADT outperforms 56.25% of its industry peers.
A Debt/Equity ratio of 1.93 is on the high side and indicates that ADT has dependencies on debt financing.
ADT's Debt to Equity ratio of 1.93 is on the low side compared to the rest of the industry. ADT is outperformed by 76.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.93 | ||
| Debt/FCF | 18.02 | ||
| Altman-Z | 0.56 |
ROIC/WACC0.64
WACC9.38%
2.3 Liquidity
ADT has a Current Ratio of 0.81. This is a bad value and indicates that ADT is not financially healthy enough and could expect problems in meeting its short term obligations.
ADT has a Current ratio of 0.81. This is in the lower half of the industry: ADT underperforms 65.63% of its industry peers.
ADT has a Quick Ratio of 0.81. This is a bad value and indicates that ADT is not financially healthy enough and could expect problems in meeting its short term obligations.
ADT's Quick ratio of 0.64 is on the low side compared to the rest of the industry. ADT is outperformed by 68.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.64 |
3. Growth
3.1 Past
ADT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 69.57%, which is quite impressive.
ADT shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.07% yearly.
ADT shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -20.17%.
ADT shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.69% yearly.
EPS 1Y (TTM)69.57%
EPS 3Y-16.02%
EPS 5Y-7.07%
EPS Q2Q%150%
Revenue 1Y (TTM)-20.17%
Revenue growth 3Y-2.13%
Revenue growth 5Y1.69%
Sales Q2Q%0.53%
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 15.74% on average per year.
The Revenue is expected to decrease by -0.86% on average over the next years.
EPS Next Y21.86%
EPS Next 2Y15.99%
EPS Next 3Y15.74%
EPS Next 5YN/A
Revenue Next Year-11.02%
Revenue Next 2Y-3.64%
Revenue Next 3Y-0.86%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 9.42, the valuation of ADT can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of ADT indicates a rather cheap valuation: ADT is cheaper than 92.19% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 29.63. ADT is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 8.96, the valuation of ADT can be described as very reasonable.
Based on the Price/Forward Earnings ratio, ADT is valued cheaply inside the industry as 95.31% of the companies are valued more expensively.
ADT's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.42 | ||
| Fwd PE | 8.96 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ADT is valued cheaper than 87.50% of the companies in the same industry.
84.38% of the companies in the same industry are more expensive than ADT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.56 | ||
| EV/EBITDA | 5.68 |
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.
ADT's earnings are expected to grow with 15.74% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.43
PEG (5Y)N/A
EPS Next 2Y15.99%
EPS Next 3Y15.74%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.93%, 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 4.39. ADT pays more dividend than 95.31% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, ADT pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.93% |
5.2 History
The dividend of ADT is nicely growing with an annual growth rate of 6.03%!
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)6.03%
Div Incr Years1
Div Non Decr Years4
5.3 Sustainability
18.54% of the earnings are spent on dividend by ADT. This is a low number and sustainable payout ratio.
The dividend of ADT is growing, but earnings are growing more, so the dividend growth is sustainable.
DP18.54%
EPS Next 2Y15.99%
EPS Next 3Y15.74%
7.35
-0.12 (-1.61%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners95.71%
Inst Owner Change-1.29%
Ins Owners1.18%
Ins Owner Change0.27%
Market Cap6.67B
Analysts73.33
Price Target8.81 (19.86%)
Short Float %3.68%
Short Ratio3.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.93% |
Yearly Dividend0.14
Dividend Growth(5Y)6.03%
DP18.54%
Div Incr Years1
Div Non Decr Years4
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)7.12%
Min EPS beat(2)-1.57%
Max EPS beat(2)15.8%
EPS beat(4)3
Avg EPS beat(4)144.01%
Min EPS beat(4)-1.57%
Max EPS beat(4)534.68%
EPS beat(8)6
Avg EPS beat(8)133.12%
EPS beat(12)7
Avg EPS beat(12)66.41%
EPS beat(16)7
Avg EPS beat(16)30.4%
Revenue beat(2)1
Avg Revenue beat(2)-0.37%
Min Revenue beat(2)-1.39%
Max Revenue beat(2)0.65%
Revenue beat(4)2
Avg Revenue beat(4)-4.02%
Min Revenue beat(4)-16.07%
Max Revenue beat(4)0.75%
Revenue beat(8)3
Avg Revenue beat(8)-5.74%
Revenue beat(12)4
Avg Revenue beat(12)-8.24%
Revenue beat(16)8
Avg Revenue beat(16)-5.93%
PT rev (1m)0%
PT rev (3m)-4.35%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)0%
EPS NY rev (3m)0.34%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.42 | ||
| Fwd PE | 8.96 | ||
| P/S | 1.37 | ||
| P/FCF | 15.56 | ||
| P/OCF | 3.63 | ||
| P/B | 1.71 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.68 |
EPS(TTM)0.78
EY10.61%
EPS(NY)0.82
Fwd EY11.17%
FCF(TTM)0.47
FCFY6.43%
OCF(TTM)2.03
OCFY27.56%
SpS5.36
BVpS4.3
TBVpS-6.51
PEG (NY)0.43
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.51% | ||
| ROE | 22.76% | ||
| ROCE | 8.09% | ||
| ROIC | 5.97% | ||
| ROICexc | 6.01% | ||
| ROICexgc | 17.94% | ||
| OM | 24.7% | ||
| PM (TTM) | 18.25% | ||
| GM | 82.68% | ||
| FCFM | 8.81% |
ROA(3y)0.54%
ROA(5y)-0.99%
ROE(3y)1.88%
ROE(5y)-5.7%
ROIC(3y)3.1%
ROIC(5y)2.41%
ROICexc(3y)3.12%
ROICexc(5y)2.43%
ROICexgc(3y)10.43%
ROICexgc(5y)8.72%
ROCE(3y)4.2%
ROCE(5y)3.27%
ROICexcg growth 3Y54.05%
ROICexcg growth 5Y15.79%
ROICexc growth 3Y70.82%
ROICexc growth 5Y26.75%
OM growth 3Y73.95%
OM growth 5Y22.41%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y3.73%
GM growth 5Y0.64%
F-Score7
Asset Turnover0.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.93 | ||
| Debt/FCF | 18.02 | ||
| Debt/EBITDA | 2.97 | ||
| Cap/Depr | 105.62% | ||
| Cap/Sales | 28.99% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 72.49% | ||
| Profit Quality | 48.3% | ||
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.64 | ||
| Altman-Z | 0.56 |
F-Score7
WACC9.38%
ROIC/WACC0.64
Cap/Depr(3y)90.44%
Cap/Depr(5y)78.04%
Cap/Sales(3y)26.99%
Cap/Sales(5y)25.14%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)69.57%
EPS 3Y-16.02%
EPS 5Y-7.07%
EPS Q2Q%150%
EPS Next Y21.86%
EPS Next 2Y15.99%
EPS Next 3Y15.74%
EPS Next 5YN/A
Revenue 1Y (TTM)-20.17%
Revenue growth 3Y-2.13%
Revenue growth 5Y1.69%
Sales Q2Q%0.53%
Revenue Next Year-11.02%
Revenue Next 2Y-3.64%
Revenue Next 3Y-0.86%
Revenue Next 5YN/A
EBIT growth 1Y11.92%
EBIT growth 3Y70.25%
EBIT growth 5Y24.48%
EBIT Next Year142.39%
EBIT Next 3Y39.32%
EBIT Next 5Y23.52%
FCF growth 1Y89.24%
FCF growth 3Y-13.87%
FCF growth 5Y-7.68%
OCF growth 1Y1.2%
OCF growth 3Y6.65%
OCF growth 5Y-1.5%