ADT INC (ADT) Stock Fundamental Analysis
USA - NYSE:ADT - US00090Q1031 - Common Stock
8.8 USD
+0.05 (+0.57%)
8.8 USD
0 (0%)
Taking everything into account, ADT scores 5 out of 10 in our fundamental rating. ADT was compared to 75 industry peers in the Diversified Consumer Services industry. ADT has an excellent profitability rating, 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.
In the past year ADT had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: ADT reported negative net income in multiple years.
ADT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ADT has a Return On Assets of 3.90%. This is in the better half of the industry: ADT outperforms 65.33% of its industry peers.
With an excellent Return On Equity value of 17.01%, ADT belongs to the best of the industry, outperforming 82.67% of the companies in the same industry.
ADT has a better Return On Invested Capital (7.00%) than 74.67% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ADT is below the industry average of 9.60%.
The last Return On Invested Capital (7.00%) for ADT is above the 3 year average (5.35%), which is a sign of increasing profitability.
| 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
With a decent Profit Margin value of 12.31%, ADT is doing good in the industry, outperforming 73.33% of the companies in the same industry.
Looking at the Operating Margin, with a value of 25.77%, ADT belongs to the top of the industry, outperforming 94.67% of the companies in the same industry.
In the last couple of years the Operating Margin of ADT has grown nicely.
ADT's Gross Margin of 81.28% is amongst the best of the industry. ADT outperforms 94.67% 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ADT is destroying value.
Compared to 1 year ago, ADT has less shares outstanding
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
ADT has an Altman-Z score of 0.59. This is a bad value and indicates that ADT is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 0.59, ADT is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
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.
ADT's Debt to FCF ratio of 10.80 is fine compared to the rest of the industry. ADT outperforms 62.67% of its industry peers.
A Debt/Equity ratio of 1.84 is on the high side and indicates that ADT has dependencies on debt financing.
With a Debt to Equity ratio value of 1.84, ADT is not doing good in the industry: 70.67% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.84 | ||
| Debt/FCF | 10.8 | ||
| Altman-Z | 0.59 |
ROIC/WACC0.97
WACC7.23%
2.3 Liquidity
A Current Ratio of 0.46 indicates that ADT may have some problems paying its short term obligations.
ADT has a worse Current ratio (0.46) than 85.33% 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.
Looking at the Quick ratio, with a value of 0.37, ADT is doing worse than 86.67% of the companies in the same industry.
| 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.
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 4.22% in the last year.
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
Based on estimates for the next years, ADT will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.13% on average per year.
ADT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.66% yearly.
EPS Next Y20.67%
EPS Next 2Y15.82%
EPS Next 3Y15.13%
EPS Next 5YN/A
Revenue Next Year5.49%
Revenue Next 2Y4.89%
Revenue Next 3Y4.66%
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 10.48 indicates a reasonable valuation of ADT.
89.33% 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 (27.86), we can say ADT is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 8.99, the valuation of ADT can be described as reasonable.
ADT's Price/Forward Earnings ratio is rather cheap when compared to the industry. ADT is cheaper than 93.33% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.32. ADT is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.48 | ||
| Fwd PE | 8.99 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ADT is valued cheaper than 92.00% of the companies in the same industry.
ADT's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ADT is cheaper than 93.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.11 | ||
| EV/EBITDA | 5.68 |
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 15.13% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.51
PEG (5Y)N/A
EPS Next 2Y15.82%
EPS Next 3Y15.13%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.51%, ADT has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.92, ADT pays a better dividend. On top of this ADT pays more dividend than 96.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, ADT has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.51% |
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 2Y15.82%
EPS Next 3Y15.13%
8.8
+0.05 (+0.57%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners77.69%
Inst Owner Change-0.85%
Ins Owners1.32%
Ins Owner Change7.17%
Market Cap7.32B
Analysts75.56
Price Target9.77 (11.02%)
Short Float %3.57%
Short Ratio2.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.51% |
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)0%
EPS NQ rev (3m)-0.92%
EPS NY rev (1m)-1.28%
EPS NY rev (3m)3.56%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.23%
Revenue NY rev (1m)0.08%
Revenue NY rev (3m)0.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.48 | ||
| Fwd PE | 8.99 | ||
| P/S | 1.45 | ||
| P/FCF | 10.11 | ||
| P/OCF | 3.68 | ||
| P/B | 2 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.68 |
EPS(TTM)0.84
EY9.55%
EPS(NY)0.98
Fwd EY11.13%
FCF(TTM)0.87
FCFY9.9%
OCF(TTM)2.39
OCFY27.18%
SpS6.09
BVpS4.4
TBVpS-7.36
PEG (NY)0.51
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 | 0.59 |
F-Score6
WACC7.23%
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 Y20.67%
EPS Next 2Y15.82%
EPS Next 3Y15.13%
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 3Y34.02%
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%