ADT INC (ADT) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ADT - US00090Q1031 - Common Stock
8.16 USD
+0.09 (+1.12%)
8.1356 USD
-0.02 (-0.3%)
Overall ADT gets a fundamental rating of 5 out of 10. We evaluated ADT against 77 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 scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
ADT had positive earnings in the past year.
In the past year ADT had a positive cash flow from operations.
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 (4.01%) than 63.64% of its industry peers.
Looking at the Return On Equity, with a value of 17.51%, ADT belongs to the top of the industry, outperforming 81.82% of the companies in the same industry.
The Return On Invested Capital of ADT (6.65%) is better than 70.13% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ADT is below the industry average of 9.62%.
The 3 year average ROIC (5.35%) for ADT is below the current ROIC(6.65%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.01% | ||
| ROE | 17.51% | ||
| ROIC | 6.65% |
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
ADT has a better Profit Margin (12.53%) than 76.62% of its industry peers.
ADT has a better Operating Margin (25.25%) than 94.81% 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 80.92%, ADT belongs to the best of the industry, outperforming 93.51% of the companies in the same industry.
ADT's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.25% | ||
| PM (TTM) | 12.53% | ||
| GM | 80.92% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ADT is destroying value.
ADT has less shares outstanding than it did 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 0.62. 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 (0.62) which is comparable to the rest of the industry.
ADT has a debt to FCF ratio of 9.92. This is a negative value and a sign of low solvency as ADT would need 9.92 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 9.92, ADT is doing good in the industry, outperforming 62.34% of the companies in the same industry.
ADT has a Debt/Equity ratio of 1.99. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.99, ADT is doing worse than 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.99 | ||
| Debt/FCF | 9.92 | ||
| Altman-Z | 0.62 |
ROIC/WACC0.98
WACC6.78%
2.3 Liquidity
A Current Ratio of 0.67 indicates that ADT may have some problems paying its short term obligations.
ADT has a Current ratio of 0.67. This is in the lower half of the industry: ADT underperforms 77.92% of its industry peers.
ADT has a Quick Ratio of 0.67. 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 (0.54) is worse than 80.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.54 |
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 5.20%.
Measured over the past years, ADT shows a decrease in Revenue. The Revenue has been decreasing by -0.90% on average per year.
EPS 1Y (TTM)11.54%
EPS 3Y93.99%
EPS 5Y-7.53%
EPS Q2Q%15%
Revenue 1Y (TTM)5.2%
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.
The Revenue is expected to grow by 4.73% on average over the next years.
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
A Price/Earnings ratio of 9.38 indicates a reasonable valuation of ADT.
ADT's Price/Earnings ratio is rather cheap when compared to the industry. ADT is cheaper than 85.71% of the companies in the same industry.
ADT is valuated cheaply when we compare the Price/Earnings ratio to 26.15, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 8.20, the valuation of ADT can be described as very reasonable.
ADT's Price/Forward Earnings ratio is rather cheap when compared to the industry. ADT is cheaper than 92.21% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.12, ADT is valued rather cheaply.
| 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 84.42% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, ADT is valued cheaper than 93.51% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.62 | ||
| 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.
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)0.46
PEG (5Y)N/A
EPS Next 2Y16.77%
EPS Next 3Y15.93%
5. Dividend
5.1 Amount
ADT has a Yearly Dividend Yield of 2.82%.
ADT's Dividend Yield is rather good when compared to the industry average which is at 2.12. ADT pays more dividend than 96.10% of the companies in the same industry.
ADT's Dividend Yield is comparable with the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.82% |
5.2 History
The dividend of ADT decreases each year by -23.00%.
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%
Div Incr Years1
Div Non Decr Years4
5.3 Sustainability
29.94% of the earnings are spent on dividend by ADT. This is a low number and sustainable payout ratio.
DP29.94%
EPS Next 2Y16.77%
EPS Next 3Y15.93%
8.16
+0.09 (+1.12%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners77.69%
Inst Owner Change-1.24%
Ins Owners1.32%
Ins Owner Change-4.14%
Market Cap6.78B
Revenue(TTM)5.11B
Net Income(TTM)640.56M
Analysts75.56
Price Target9.77 (19.73%)
Short Float %4.17%
Short Ratio3.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.82% |
Yearly Dividend0.2
Dividend Growth(5Y)-23%
DP29.94%
Div Incr Years1
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.14%
Min EPS beat(2)6.41%
Max EPS beat(2)13.86%
EPS beat(4)4
Avg EPS beat(4)8.73%
Min EPS beat(4)5.33%
Max EPS beat(4)13.86%
EPS beat(8)7
Avg EPS beat(8)76.37%
EPS beat(12)10
Avg EPS beat(12)91.66%
EPS beat(16)11
Avg EPS beat(16)51.99%
Revenue beat(2)0
Avg Revenue beat(2)-0.46%
Min Revenue beat(2)-0.76%
Max Revenue beat(2)-0.16%
Revenue beat(4)2
Avg Revenue beat(4)0.27%
Min Revenue beat(4)-0.76%
Max Revenue beat(4)1.12%
Revenue beat(8)4
Avg Revenue beat(8)-1.87%
Revenue beat(12)5
Avg Revenue beat(12)-3.74%
Revenue beat(16)6
Avg Revenue beat(16)-6.11%
PT rev (1m)0%
PT rev (3m)2.13%
EPS NQ rev (1m)-0.44%
EPS NQ rev (3m)-2.65%
EPS NY rev (1m)-0.26%
EPS NY rev (3m)-1.67%
Revenue NQ rev (1m)-0.98%
Revenue NQ rev (3m)-0.61%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)0.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.38 | ||
| Fwd PE | 8.2 | ||
| P/S | 1.33 | ||
| P/FCF | 8.62 | ||
| P/OCF | 3.44 | ||
| 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)0.95
FCFY11.6%
OCF(TTM)2.37
OCFY29.05%
SpS6.15
BVpS4.4
TBVpS-7.33
PEG (NY)0.46
PEG (5Y)N/A
Graham Number9.28
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.01% | ||
| ROE | 17.51% | ||
| ROCE | 8.9% | ||
| ROIC | 6.65% | ||
| ROICexc | 6.68% | ||
| ROICexgc | 20.58% | ||
| OM | 25.25% | ||
| PM (TTM) | 12.53% | ||
| GM | 80.92% | ||
| FCFM | 15.39% |
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 | 1.99 | ||
| Debt/FCF | 9.92 | ||
| Debt/EBITDA | 2.74 | ||
| Cap/Depr | 86.6% | ||
| Cap/Sales | 23.16% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 74.13% | ||
| Profit Quality | 122.81% | ||
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.54 | ||
| Altman-Z | 0.62 |
F-Score6
WACC6.78%
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)5.2%
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 1Y7.55%
EBIT growth 3Y185.05%
EBIT growth 5Y29.39%
EBIT Next Year118%
EBIT Next 3Y34.02%
EBIT Next 5Y25.29%
FCF growth 1Y60.08%
FCF growth 3Y76.31%
FCF growth 5Y4.03%
OCF growth 1Y8.72%
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.