ADT INC (ADT) Stock Fundamental Analysis
USA - NYSE:ADT - US00090Q1031 - Common Stock
8.57 USD
-0.08 (-0.92%)
8.5606 USD
-0.01 (-0.11%)
Overall ADT gets a fundamental rating of 5 out of 10. We evaluated ADT against 74 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 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
With a decent Return On Assets value of 3.90%, ADT is doing good in the industry, outperforming 64.86% 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 82.43% of the companies in the same industry.
The Return On Invested Capital of ADT (7.00%) is better than 74.32% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ADT is below the industry average of 9.88%.
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
ADT has a Profit Margin of 12.31%. This is in the better half of the industry: ADT outperforms 72.97% of its industry peers.
Looking at the Operating Margin, with a value of 25.77%, ADT belongs to the top of the industry, outperforming 94.59% of the companies in the same industry.
In the last couple of years the Operating Margin of ADT has grown nicely.
With an excellent Gross Margin value of 81.28%, ADT belongs to the best of the industry, outperforming 94.59% of the companies in the same industry.
ADT's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.77% | ||
| 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
The number of shares outstanding for ADT has been increased compared to 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 0.58, we must say that ADT is in the distress zone and has some risk of bankruptcy.
ADT has a Altman-Z score of 0.58. This is comparable to the rest of the industry: ADT outperforms 41.89% of its industry peers.
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.
Looking at the Debt to FCF ratio, with a value of 10.80, ADT is in the better half of the industry, outperforming 62.16% of the companies in the same industry.
A Debt/Equity ratio of 1.84 is on the high side and indicates that ADT has dependencies on debt 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 70.27% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.84 | ||
| Debt/FCF | 10.8 | ||
| Altman-Z | 0.58 |
ROIC/WACC0.97
WACC7.2%
2.3 Liquidity
A Current Ratio of 0.46 indicates that ADT may have some problems paying its short term obligations.
ADT's Current ratio of 0.46 is on the low side compared to the rest of the industry. ADT is outperformed by 85.14% of its industry peers.
A Quick Ratio of 0.37 indicates that ADT may have some problems paying its short term obligations.
With a Quick ratio value of 0.37, ADT is not doing good in the industry: 86.49% 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
The Earnings Per Share has grown by an impressive 27.27% over the past year.
Measured over the past years, ADT shows a decrease in Earnings Per Share. The EPS has been decreasing by -7.53% on average per year.
ADT shows a small growth in Revenue. In the last year, the Revenue has grown by 4.22%.
ADT shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.90% yearly.
EPS 1Y (TTM)27.27%
EPS 3Y93.99%
EPS 5Y-7.53%
EPS Q2Q%35.29%
Revenue 1Y (TTM)4.22%
Revenue growth 3Y-2.64%
Revenue growth 5Y-0.9%
Sales Q2Q%6.8%
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 16.40% yearly.
Based on estimates for the next years, ADT will show a small growth in Revenue. The Revenue will grow by 4.66% on average per year.
EPS Next Y22.24%
EPS Next 2Y16.96%
EPS Next 3Y16.4%
EPS Next 5YN/A
Revenue Next Year5.49%
Revenue Next 2Y4.89%
Revenue Next 3Y4.66%
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
Based on the Price/Earnings ratio of 10.20, the valuation of ADT can be described as reasonable.
89.19% of the companies in the same industry are more expensive than ADT, based on the Price/Earnings ratio.
ADT is valuated cheaply when we compare the Price/Earnings ratio to 27.38, which is the current average of the S&P500 Index.
ADT is valuated reasonably with a Price/Forward Earnings ratio of 8.58.
ADT's Price/Forward Earnings ratio is rather cheap when compared to the industry. ADT is cheaper than 94.59% of the companies in the same industry.
ADT is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.86, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.2 | ||
| Fwd PE | 8.58 |
4.2 Price Multiples
ADT's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ADT is cheaper than 91.89% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ADT indicates a rather cheap valuation: ADT is cheaper than 91.89% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.84 | ||
| EV/EBITDA | 5.63 |
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.
ADT's earnings are expected to grow with 16.40% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.46
PEG (5Y)N/A
EPS Next 2Y16.96%
EPS Next 3Y16.4%
5. Dividend
5.1 Amount
ADT has a Yearly Dividend Yield of 2.49%.
Compared to an average industry Dividend Yield of 3.04, ADT pays a better dividend. On top of this ADT pays more dividend than 94.59% of the companies listed in the same industry.
ADT's Dividend Yield is comparable with the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.49% |
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
ADT pays out 31.50% of its income as dividend. This is a sustainable payout ratio.
DP31.5%
EPS Next 2Y16.96%
EPS Next 3Y16.4%
8.57
-0.08 (-0.92%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners72.55%
Inst Owner Change-0.85%
Ins Owners1.32%
Ins Owner Change7.17%
Market Cap7.12B
Analysts75.56
Price Target9.77 (14%)
Short Float %3.59%
Short Ratio2.07
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.49% |
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)2.13%
PT rev (3m)3.68%
EPS NQ rev (1m)-1.28%
EPS NQ rev (3m)-0.92%
EPS NY rev (1m)4.9%
EPS NY rev (3m)4.9%
Revenue NQ rev (1m)0.15%
Revenue NQ rev (3m)-0.23%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)0.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.2 | ||
| Fwd PE | 8.58 | ||
| P/S | 1.41 | ||
| P/FCF | 9.84 | ||
| P/OCF | 3.58 | ||
| P/B | 1.95 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.63 |
EPS(TTM)0.84
EY9.8%
EPS(NY)1
Fwd EY11.65%
FCF(TTM)0.87
FCFY10.16%
OCF(TTM)2.39
OCFY27.91%
SpS6.09
BVpS4.4
TBVpS-7.36
PEG (NY)0.46
PEG (5Y)N/A
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%
ROICexcg growth 3Y161.56%
ROICexcg 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 | 0.58 |
F-Score6
WACC7.2%
ROIC/WACC0.97
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)27.27%
EPS 3Y93.99%
EPS 5Y-7.53%
EPS Q2Q%35.29%
EPS Next Y22.24%
EPS Next 2Y16.96%
EPS Next 3Y16.4%
EPS Next 5YN/A
Revenue 1Y (TTM)4.22%
Revenue growth 3Y-2.64%
Revenue growth 5Y-0.9%
Sales Q2Q%6.8%
Revenue Next Year5.49%
Revenue Next 2Y4.89%
Revenue Next 3Y4.66%
Revenue Next 5YN/A
EBIT growth 1Y13.89%
EBIT growth 3Y185.05%
EBIT growth 5Y29.39%
EBIT Next Year118%
EBIT Next 3Y34.23%
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%