ADT INC (ADT) Stock Fundamental Analysis
NYSE:ADT - New York Stock Exchange, Inc. - US00090Q1031 - Common Stock
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. While ADT has a great profitability rating, there are quite some concerns on its financial health. ADT is valued quite cheap, but it does not seem to be growing. ADT also has an excellent dividend rating.
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.
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
ADT's Return On Assets of 5.51% is fine compared to the rest of the industry. ADT outperforms 76.19% of its industry peers.
The Return On Equity of ADT (22.76%) is better than 85.71% of its industry peers.
ADT has a Return On Invested Capital of 5.97%. This is in the better half of the industry: ADT outperforms 71.43% of its industry peers.
ADT had an Average Return On Invested Capital over the past 3 years of 3.10%. This is significantly below the industry average of 11.87%.
The 3 year average ROIC (3.10%) for ADT is below the current ROIC(5.97%), indicating increased profibility in the last year.
| 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
With an excellent Profit Margin value of 18.25%, ADT belongs to the best of the industry, outperforming 92.06% of the companies in the same industry.
ADT has a Operating Margin of 24.70%. This is amongst the best in the industry. ADT outperforms 95.24% of its industry peers.
ADT's Operating Margin has improved in the last couple of years.
The Gross Margin of ADT (82.68%) is better than 93.65% of its industry peers.
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
ADT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
ADT has more shares outstanding than it did 1 year ago.
ADT has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, ADT has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.55, we must say that ADT is in the distress zone and has some risk of bankruptcy.
ADT's Altman-Z score of 0.55 is in line compared to the rest of the industry. ADT outperforms 41.27% 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 has a Debt to FCF ratio of 18.02. This is comparable to the rest of the industry: ADT outperforms 52.38% 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.
The Debt to Equity ratio of ADT (1.93) is worse than 77.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.93 | ||
| Debt/FCF | 18.02 | ||
| Altman-Z | 0.55 |
ROIC/WACC0.63
WACC9.43%
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 worse Current ratio (0.81) than 68.25% 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.
Looking at the Quick ratio, with a value of 0.64, ADT is doing worse than 73.02% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.64 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 69.57% over the past year.
The Earnings Per Share has been decreasing by -7.07% on average over the past years.
Looking at the last year, ADT shows a very negative growth in Revenue. The Revenue has decreased by -20.17% in the last year.
The Revenue has been growing slightly by 1.69% on average over the past years.
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
The Earnings Per Share is expected to grow by 15.66% on average over the next years. This is quite good.
ADT is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.86% yearly.
EPS Next Y21.86%
EPS Next 2Y15.85%
EPS Next 3Y15.66%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 9.32, which indicates a very decent valuation of ADT.
Based on the Price/Earnings ratio, ADT is valued cheaply inside the industry as 93.65% of the companies are valued more expensively.
ADT is valuated cheaply when we compare the Price/Earnings ratio to 27.96, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 8.88, the valuation of ADT can be described as very reasonable.
Based on the Price/Forward Earnings ratio, ADT is valued cheaper than 95.24% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.11, ADT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.32 | ||
| Fwd PE | 8.88 |
4.2 Price Multiples
88.89% of the companies in the same industry are more expensive than ADT, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ADT indicates a somewhat cheap valuation: ADT is cheaper than 79.37% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.39 | ||
| EV/EBITDA | 5.59 |
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 15.66% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.43
PEG (5Y)N/A
EPS Next 2Y15.85%
EPS Next 3Y15.66%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.05%, 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 4.24. ADT pays more dividend than 95.24% of the companies in the same industry.
ADT's Dividend Yield is a higher than the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.05% |
5.2 History
On average, the dividend of ADT grows each year by 6.03%, which is quite nice.
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)6.03%
Div Incr Years1
Div Non Decr Years4
5.3 Sustainability
ADT pays out 18.54% of its income as dividend. This is a sustainable payout ratio.
ADT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP18.54%
EPS Next 2Y15.85%
EPS Next 3Y15.66%
ADT INC
NYSE:ADT (1/17/2025, 8:04:00 PM)
After market: 7.27 0 (0%)7.27
+0.05 (+0.69%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners95.71%
Inst Owner Change0%
Ins Owners1.18%
Ins Owner Change0.15%
Market Cap6.59B
Analysts73.33
Price Target8.81 (21.18%)
Short Float %2.59%
Short Ratio3.86
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.05% |
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)1.17%
PT rev (3m)-4.35%
EPS NQ rev (1m)0%
EPS NQ rev (3m)9.62%
EPS NY rev (1m)0.34%
EPS NY rev (3m)8.24%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.19%
Revenue NY rev (1m)-0.08%
Revenue NY rev (3m)-0.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.32 | ||
| Fwd PE | 8.88 | ||
| P/S | 1.36 | ||
| P/FCF | 15.39 | ||
| P/OCF | 3.59 | ||
| P/B | 1.69 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.59 |
EPS(TTM)0.78
EY10.73%
EPS(NY)0.82
Fwd EY11.26%
FCF(TTM)0.47
FCFY6.5%
OCF(TTM)2.03
OCFY27.86%
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 | 0.55 |
F-Score7
WACC9.43%
ROIC/WACC0.63
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 2Y15.85%
EPS Next 3Y15.66%
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%