ADT INC (ADT) Stock Fundamental Analysis
NYSE:ADT - New York Stock Exchange, Inc. - US00090Q1031 - Common Stock - Currency: USD
Overall ADT gets a fundamental rating of 5 out of 10. We evaluated ADT against 72 industry peers in the Diversified Consumer Services industry. ADT has an excellent profitability rating, but there are concerns on its financial health. ADT is valued quite cheap, while showing a decent growth score. This is a good combination!
1. Profitability
1.1 Basic Checks
In the past year ADT was profitable.
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's Return On Assets of 3.90% is fine compared to the rest of the industry. ADT outperforms 63.89% of its industry peers.
ADT's Return On Equity of 17.01% is amongst the best of the industry. ADT outperforms 80.56% of its industry peers.
The Return On Invested Capital of ADT (7.00%) is better than 77.78% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ADT is significantly below the industry average of 10.66%.
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 76.39% of its industry peers.
With an excellent Operating Margin value of 25.77%, ADT belongs to the best of the industry, outperforming 95.83% of the companies in the same industry.
ADT's Operating Margin has improved in the last couple of years.
ADT's Gross Margin of 81.28% is amongst the best of the industry. ADT outperforms 94.44% of its industry peers.
In the last couple of years the Gross Margin of ADT has grown nicely.
| 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
ADT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for ADT has been reduced compared to 1 year ago.
ADT has more shares outstanding than it did 5 years ago.
ADT has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.57, we must say that ADT is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 0.57, ADT perfoms like the industry average, outperforming 40.28% of the companies in the same industry.
The Debt to FCF ratio of ADT is 10.80, which is on the high side as it means it would take ADT, 10.80 years of fcf income to pay off 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 61.11% 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 has a worse Debt to Equity ratio (1.84) than 69.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.84 | ||
| Debt/FCF | 10.8 | ||
| Altman-Z | 0.57 |
ROIC/WACC0.92
WACC7.62%
2.3 Liquidity
A Current Ratio of 0.46 indicates that ADT may have some problems paying its short term obligations.
ADT has a Current ratio of 0.46. This is amonst the worse of the industry: ADT underperforms 83.33% of its industry peers.
ADT has a Quick Ratio of 0.46. 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 0.37 is on the low side compared to the rest of the industry. ADT is outperformed by 84.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.46 | ||
| Quick Ratio | 0.37 |
3. Growth
3.1 Past
ADT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 27.27%, which is quite impressive.
The Earnings Per Share has been decreasing by -7.53% on average over the past years.
ADT shows a small growth in Revenue. In the last year, the Revenue has grown by 4.22%.
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)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
The Earnings Per Share is expected to grow by 14.03% on average over the next years. This is quite good.
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
A Price/Earnings ratio of 9.95 indicates a reasonable valuation of ADT.
90.28% of the companies in the same industry are more expensive than ADT, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of ADT to the average of the S&P500 Index (27.93), we can say ADT is valued rather cheaply.
A Price/Forward Earnings ratio of 8.85 indicates a reasonable valuation of ADT.
ADT's Price/Forward Earnings ratio is rather cheap when compared to the industry. ADT is cheaper than 95.83% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ADT to the average of the S&P500 Index (37.78), we can say ADT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.95 | ||
| Fwd PE | 8.85 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ADT is valued cheaply inside the industry as 88.89% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ADT is valued cheaper than 91.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.66 | ||
| EV/EBITDA | 5.58 |
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 14.03% in the coming years.
PEG (NY)0.6
PEG (5Y)N/A
EPS Next 2Y13.73%
EPS Next 3Y14.03%
5. Dividend
5.1 Amount
ADT has a Yearly Dividend Yield of 2.61%.
ADT's Dividend Yield is rather good when compared to the industry average which is at 3.68. ADT pays more dividend than 94.44% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, ADT has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.61% |
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
31.50% of the earnings are spent on dividend by ADT. This is a low number and sustainable payout ratio.
DP31.5%
EPS Next 2Y13.73%
EPS Next 3Y14.03%
8.36
-0.08 (-0.95%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners69.71%
Inst Owner Change0.38%
Ins Owners1.38%
Ins Owner Change4.62%
Market Cap6.99B
Analysts75.56
Price Target9.42 (12.68%)
Short Float %5.84%
Short Ratio1.83
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.61% |
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)0%
PT rev (3m)1.54%
EPS NQ rev (1m)0.3%
EPS NQ rev (3m)0.63%
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%
Revenue NY rev (3m)0.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.95 | ||
| Fwd PE | 8.85 | ||
| P/S | 1.38 | ||
| P/FCF | 9.66 | ||
| P/OCF | 3.52 | ||
| P/B | 1.91 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.58 |
EPS(TTM)0.84
EY10.05%
EPS(NY)0.94
Fwd EY11.29%
FCF(TTM)0.87
FCFY10.35%
OCF(TTM)2.38
OCFY28.43%
SpS6.05
BVpS4.37
TBVpS-7.32
PEG (NY)0.6
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 | 0.57 |
F-Score6
WACC7.62%
ROIC/WACC0.92
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 Y16.52%
EPS Next 2Y13.73%
EPS Next 3Y14.03%
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 Year5.19%
Revenue Next 2Y4.76%
Revenue Next 3Y4.57%
Revenue Next 5YN/A
EBIT growth 1Y13.89%
EBIT growth 3Y185.05%
EBIT growth 5Y29.39%
EBIT Next Year118.16%
EBIT Next 3Y34.09%
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%