ADT INC (ADT) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ADT - US00090Q1031 - Common Stock
8.25 USD
+0.09 (+1.1%)
8.25 USD
0 (0%)
Taking everything into account, ADT scores 5 out of 10 in our fundamental rating. ADT was compared to 77 industry peers in the Diversified Consumer Services industry. While ADT belongs to the best of the industry regarding profitability, 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.
The reported net income has been mixed in the past 5 years: ADT reported negative net income in multiple years.
Each year in the past 5 years ADT had a positive operating cash flow.
1.2 Ratios
ADT has a Return On Assets of 4.01%. This is in the better half of the industry: ADT outperforms 63.64% of its industry peers.
The Return On Equity of ADT (17.51%) is better than 81.82% of its industry peers.
With a decent Return On Invested Capital value of 6.65%, ADT is doing good in the industry, outperforming 70.13% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ADT is below the industry average of 9.42%.
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
With a decent Profit Margin value of 12.53%, ADT is doing good in the industry, outperforming 76.62% of the companies in the same industry.
With an excellent Operating Margin value of 25.25%, ADT belongs to the best of the industry, outperforming 94.81% of the companies in the same industry.
ADT's Operating Margin has improved in the last couple of years.
ADT has a better Gross Margin (80.92%) than 93.51% of its industry peers.
In the last couple of years the Gross Margin of ADT has grown nicely.
| 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 of 0.62. This is comparable to the rest of the industry: ADT outperforms 41.56% of its industry peers.
The Debt to FCF ratio of ADT is 9.92, which is on the high side as it means it would take ADT, 9.92 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ADT (9.92) is better than 62.34% of its industry peers.
A Debt/Equity ratio of 1.99 is on the high side and indicates that ADT has dependencies on debt financing.
ADT's Debt to Equity ratio of 1.99 is on the low side compared to the rest of the industry. ADT is outperformed by 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.99 | ||
| Debt/FCF | 9.92 | ||
| Altman-Z | 0.62 |
ROIC/WACC0.98
WACC6.78%
2.3 Liquidity
ADT has a Current 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 Current ratio of ADT (0.67) is worse than 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.
ADT has a Quick ratio of 0.54. This is amonst the worse of the industry: ADT underperforms 80.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.54 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 11.54% over the past year.
The Earnings Per Share has been decreasing by -7.53% on average over the past years.
Looking at the last year, ADT shows a small growth in Revenue. The Revenue has grown by 5.20% in the last year.
The Revenue has been decreasing by -0.90% on average over the past years.
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
Based on estimates for the next years, ADT will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.93% on average per year.
ADT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.73% yearly.
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
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
Based on the Price/Earnings ratio of 9.48, the valuation of ADT can be described as reasonable.
Based on the Price/Earnings ratio, ADT is valued cheaply inside the industry as 85.71% of the companies are valued more expensively.
ADT is valuated cheaply when we compare the Price/Earnings ratio to 26.31, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 8.29, the valuation of ADT can be described as reasonable.
92.21% of the companies in the same industry are more expensive than ADT, based on the Price/Forward Earnings ratio.
ADT's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 36.59.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.48 | ||
| Fwd PE | 8.29 |
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 cheaply inside the industry as 93.51% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.72 | ||
| EV/EBITDA | 5.46 |
4.3 Compensation for Growth
ADT's 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)0.47
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%. Purely for dividend investing, there may be better candidates out there.
ADT's Dividend Yield is rather good when compared to the industry average which is at 2.13. ADT pays more dividend than 96.10% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, ADT has a dividend comparable with the average S&P500 company.
| 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%
8.25
+0.09 (+1.1%)
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 Cap6.86B
Revenue(TTM)5.11B
Net Income(TTM)640.56M
Analysts75.56
Price Target9.77 (18.42%)
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 | 9.48 | ||
| Fwd PE | 8.29 | ||
| P/S | 1.34 | ||
| P/FCF | 8.72 | ||
| P/OCF | 3.48 | ||
| P/B | 1.87 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.46 |
EPS(TTM)0.87
EY10.55%
EPS(NY)1
Fwd EY12.06%
FCF(TTM)0.95
FCFY11.47%
OCF(TTM)2.37
OCFY28.73%
SpS6.15
BVpS4.4
TBVpS-7.33
PEG (NY)0.47
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.