ADT INC (ADT) Stock Fundamental Analysis
NYSE:ADT - New York Stock Exchange, Inc. - US00090Q1031 - Common Stock - Currency: USD
Taking everything into account, ADT scores 5 out of 10 in our fundamental rating. ADT was compared to 71 industry peers in the Diversified Consumer Services industry. ADT scores excellent on profitability, but there are concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on ADT.
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's Return On Assets of 3.47% is fine compared to the rest of the industry. ADT outperforms 63.38% of its industry peers.
ADT's Return On Equity of 15.20% is fine compared to the rest of the industry. ADT outperforms 76.06% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.34%, ADT is in the better half of the industry, outperforming 74.65% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ADT is significantly below the industry average of 10.64%.
The 3 year average ROIC (5.35%) for ADT is below the current ROIC(6.34%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.47% | ||
| ROE | 15.2% | ||
| ROIC | 6.34% |
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
The Profit Margin of ADT (11.05%) is better than 73.24% of its industry peers.
ADT has a better Operating Margin (25.07%) than 94.37% of its industry peers.
ADT's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 82.06%, ADT belongs to the top of the industry, outperforming 94.37% of the companies in the same industry.
ADT's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.07% | ||
| PM (TTM) | 11.05% | ||
| GM | 82.06% |
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.
The number of shares outstanding for ADT has been reduced compared to 1 year ago.
Compared to 5 years ago, ADT has more shares outstanding
Compared to 1 year ago, ADT has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.61, we must say that ADT is in the distress zone and has some risk of bankruptcy.
ADT has a Altman-Z score (0.61) which is comparable to the rest of the industry.
ADT has a debt to FCF ratio of 10.34. This is a negative value and a sign of low solvency as ADT would need 10.34 years to pay back of all of its debts.
ADT has a better Debt to FCF ratio (10.34) than 60.56% of its industry peers.
ADT has a Debt/Equity ratio of 2.10. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of ADT (2.10) is worse than 70.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.1 | ||
| Debt/FCF | 10.34 | ||
| Altman-Z | 0.61 |
ROIC/WACC0.94
WACC6.72%
2.3 Liquidity
ADT has a Current Ratio of 0.77. 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 Current ratio of ADT (0.77) is worse than 66.20% of its industry peers.
ADT has a Quick Ratio of 0.77. 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 0.60 is on the low side compared to the rest of the industry. ADT is outperformed by 73.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.6 |
3. Growth
3.1 Past
ADT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.00%, which is quite impressive.
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.
Looking at the last year, ADT shows a decrease in Revenue. The Revenue has decreased by -5.08% in the last year.
The Revenue has been decreasing by -0.90% on average over the past years.
EPS 1Y (TTM)20%
EPS 3Y93.99%
EPS 5Y-7.53%
EPS Q2Q%31.25%
Revenue 1Y (TTM)-5.08%
Revenue growth 3Y-2.64%
Revenue growth 5Y-0.9%
Sales Q2Q%4.8%
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 14.03% on average per year.
The Revenue is expected to grow by 4.57% on average over the next years.
EPS Next Y16.52%
EPS Next 2Y13.73%
EPS Next 3Y14.03%
EPS Next 5YN/A
Revenue Next Year5.19%
Revenue Next 2Y4.76%
Revenue Next 3Y4.57%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
ADT is valuated reasonably with a Price/Earnings ratio of 10.86.
Compared to the rest of the industry, the Price/Earnings ratio of ADT indicates a rather cheap valuation: ADT is cheaper than 90.14% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.45. ADT is valued rather cheaply when compared to this.
ADT is valuated reasonably with a Price/Forward Earnings ratio of 8.97.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ADT indicates a rather cheap valuation: ADT is cheaper than 97.18% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.90. ADT is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.86 | ||
| Fwd PE | 8.97 |
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 88.73% of the companies listed 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 92.96% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.37 | ||
| EV/EBITDA | 5.67 |
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 14.03% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.66
PEG (5Y)N/A
EPS Next 2Y13.73%
EPS Next 3Y14.03%
5. Dividend
5.1 Amount
ADT has a Yearly Dividend Yield of 2.62%.
Compared to an average industry Dividend Yield of 4.09, ADT pays a better dividend. On top of this ADT pays more dividend than 94.37% of the companies listed in the same industry.
ADT's Dividend Yield is comparable with the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.62% |
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
36.19% of the earnings are spent on dividend by ADT. This is a low number and sustainable payout ratio.
DP36.19%
EPS Next 2Y13.73%
EPS Next 3Y14.03%
8.47
+0.2 (+2.42%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners69.71%
Inst Owner Change-4.17%
Ins Owners1.38%
Ins Owner Change8.58%
Market Cap7.09B
Analysts75.56
Price Target9.42 (11.22%)
Short Float %4.86%
Short Ratio1.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.62% |
Yearly Dividend0.2
Dividend Growth(5Y)-23%
DP36.19%
Div Incr Years1
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.32%
Min EPS beat(2)5.33%
Max EPS beat(2)9.32%
EPS beat(4)3
Avg EPS beat(4)7.22%
Min EPS beat(4)-1.57%
Max EPS beat(4)15.8%
EPS beat(8)7
Avg EPS beat(8)135.81%
EPS beat(12)9
Avg EPS beat(12)86.38%
EPS beat(16)9
Avg EPS beat(16)37.94%
Revenue beat(2)2
Avg Revenue beat(2)1%
Min Revenue beat(2)0.88%
Max Revenue beat(2)1.12%
Revenue beat(4)3
Avg Revenue beat(4)0.31%
Min Revenue beat(4)-1.39%
Max Revenue beat(4)1.12%
Revenue beat(8)4
Avg Revenue beat(8)-5.15%
Revenue beat(12)5
Avg Revenue beat(12)-8.3%
Revenue beat(16)8
Avg Revenue beat(16)-5.96%
PT rev (1m)0%
PT rev (3m)6.21%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.33%
EPS NY rev (1m)0%
EPS NY rev (3m)2.24%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.42%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)0.6%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.86 | ||
| Fwd PE | 8.97 | ||
| P/S | 1.42 | ||
| P/FCF | 9.37 | ||
| P/OCF | 3.56 | ||
| P/B | 1.96 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.67 |
EPS(TTM)0.78
EY9.21%
EPS(NY)0.94
Fwd EY11.15%
FCF(TTM)0.9
FCFY10.67%
OCF(TTM)2.38
OCFY28.05%
SpS5.95
BVpS4.32
TBVpS-7.28
PEG (NY)0.66
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.47% | ||
| ROE | 15.2% | ||
| ROCE | 8.48% | ||
| ROIC | 6.34% | ||
| ROICexc | 6.34% | ||
| ROICexgc | 18.65% | ||
| OM | 25.07% | ||
| PM (TTM) | 11.05% | ||
| GM | 82.06% | ||
| FCFM | 15.19% |
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 Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.1 | ||
| Debt/FCF | 10.34 | ||
| Debt/EBITDA | 2.93 | ||
| Cap/Depr | 91.25% | ||
| Cap/Sales | 24.75% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 76.52% | ||
| Profit Quality | 137.51% | ||
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.6 | ||
| Altman-Z | 0.61 |
F-Score6
WACC6.72%
ROIC/WACC0.94
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)20%
EPS 3Y93.99%
EPS 5Y-7.53%
EPS Q2Q%31.25%
EPS Next Y16.52%
EPS Next 2Y13.73%
EPS Next 3Y14.03%
EPS Next 5YN/A
Revenue 1Y (TTM)-5.08%
Revenue growth 3Y-2.64%
Revenue growth 5Y-0.9%
Sales Q2Q%4.8%
Revenue Next Year5.19%
Revenue Next 2Y4.76%
Revenue Next 3Y4.57%
Revenue Next 5YN/A
EBIT growth 1Y5.69%
EBIT growth 3Y185.05%
EBIT growth 5Y29.39%
EBIT Next Year118.16%
EBIT Next 3Y34.09%
EBIT Next 5Y25.29%
FCF growth 1Y78.13%
FCF growth 3Y76.31%
FCF growth 5Y4.03%
OCF growth 1Y5.37%
OCF growth 3Y4.54%
OCF growth 5Y0.13%