ADT INC (ADT) Stock Fundamental Analysis
NYSE:ADT - New York Stock Exchange, Inc. - US00090Q1031 - Common Stock - Currency: USD
ADT gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 73 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
In the past year ADT was profitable.
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.
ADT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ADT has a Return On Assets of 3.12%. This is in the better half of the industry: ADT outperforms 71.23% of its industry peers.
ADT's Return On Equity of 13.18% is fine compared to the rest of the industry. ADT outperforms 76.71% of its industry peers.
The Return On Invested Capital of ADT (6.23%) is better than 73.97% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ADT is significantly below the industry average of 11.99%.
The last Return On Invested Capital (6.23%) for ADT is above the 3 year average (5.35%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.12% | ||
| ROE | 13.18% | ||
| ROIC | 6.23% |
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 (10.23%) is better than 79.45% of its industry peers.
The Operating Margin of ADT (25.15%) is better than 94.52% of its industry peers.
In the last couple of years the Operating Margin of ADT has grown nicely.
Looking at the Gross Margin, with a value of 82.71%, ADT belongs to the top of the industry, outperforming 94.52% of the companies in the same industry.
In the last couple of years the Gross Margin of ADT has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.15% | ||
| PM (TTM) | 10.23% | ||
| GM | 82.71% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ADT is destroying value.
Compared to 1 year ago, ADT has less shares outstanding
Compared to 5 years ago, ADT has more shares outstanding
The debt/assets ratio for ADT has been reduced compared to a year ago.
2.2 Solvency
ADT has an Altman-Z score of 0.58. 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 0.58, ADT perfoms like the industry average, outperforming 41.10% of the companies in the same industry.
ADT has a debt to FCF ratio of 12.59. This is a negative value and a sign of low solvency as ADT would need 12.59 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 12.59, ADT is doing good in the industry, outperforming 64.38% of the companies in the same industry.
ADT has a Debt/Equity ratio of 1.98. This is a high value indicating a heavy dependency on external financing.
ADT has a worse Debt to Equity ratio (1.98) than 68.49% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.98 | ||
| Debt/FCF | 12.59 | ||
| Altman-Z | 0.58 |
ROIC/WACC0.78
WACC7.95%
2.3 Liquidity
ADT has a Current Ratio of 0.80. 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 Current ratio of 0.80 is on the low side compared to the rest of the industry. ADT is outperformed by 60.27% of its industry peers.
ADT has a Quick Ratio of 0.80. This is a bad value and indicates that ADT is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.64, ADT is not doing good in the industry: 65.75% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.64 |
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.
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 5.28% in the last year.
ADT shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.90% yearly.
EPS 1Y (TTM)20%
EPS 3Y93.99%
EPS 5Y-7.53%
EPS Q2Q%31.25%
Revenue 1Y (TTM)5.28%
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 13.08% on average per year.
The Revenue is expected to grow by 4.73% on average over the next years.
EPS Next Y13.97%
EPS Next 2Y12.88%
EPS Next 3Y13.08%
EPS Next 5YN/A
Revenue Next Year4.5%
Revenue Next 2Y4.56%
Revenue Next 3Y4.73%
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.
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 10.27.
ADT's Price/Earnings ratio is rather cheap when compared to the industry. ADT is cheaper than 89.04% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.85. ADT is valued rather cheaply when compared to this.
ADT is valuated reasonably with a Price/Forward Earnings ratio of 8.61.
95.89% of the companies in the same industry are more expensive than ADT, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of ADT to the average of the S&P500 Index (20.77), we can say ADT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.27 | ||
| Fwd PE | 8.61 |
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 86.30% 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 89.04% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.08 | ||
| EV/EBITDA | 5.59 |
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.
ADT has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as ADT's earnings are expected to grow with 13.08% in the coming years.
PEG (NY)0.74
PEG (5Y)N/A
EPS Next 2Y12.88%
EPS Next 3Y13.08%
5. Dividend
5.1 Amount
ADT has a Yearly Dividend Yield of 2.76%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.79, ADT pays a better dividend. On top of this ADT pays more dividend than 95.89% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.45, ADT has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.76% |
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
36.38% of the earnings are spent on dividend by ADT. This is a low number and sustainable payout ratio.
DP36.38%
EPS Next 2Y12.88%
EPS Next 3Y13.08%
8.01
-0.01 (-0.12%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners95.04%
Inst Owner Change0.18%
Ins Owners1.19%
Ins Owner Change5.92%
Market Cap6.78B
Analysts73.33
Price Target9.28 (15.86%)
Short Float %4.38%
Short Ratio1.21
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.76% |
Yearly Dividend0.2
Dividend Growth(5Y)-23%
DP36.38%
Div Incr Years1
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.57%
Min EPS beat(2)5.33%
Max EPS beat(2)15.8%
EPS beat(4)3
Avg EPS beat(4)11.68%
Min EPS beat(4)-1.57%
Max EPS beat(4)27.14%
EPS beat(8)7
Avg EPS beat(8)139.58%
EPS beat(12)8
Avg EPS beat(12)76.5%
EPS beat(16)8
Avg EPS beat(16)32.42%
Revenue beat(2)2
Avg Revenue beat(2)0.89%
Min Revenue beat(2)0.65%
Max Revenue beat(2)1.12%
Revenue beat(4)3
Avg Revenue beat(4)0.28%
Min Revenue beat(4)-1.39%
Max Revenue beat(4)1.12%
Revenue beat(8)3
Avg Revenue beat(8)-5.67%
Revenue beat(12)4
Avg Revenue beat(12)-8.47%
Revenue beat(16)8
Avg Revenue beat(16)-5.92%
PT rev (1m)4.6%
PT rev (3m)5.32%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.2%
EPS NY rev (1m)0%
EPS NY rev (3m)1.62%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.24%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)0.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.27 | ||
| Fwd PE | 8.61 | ||
| P/S | 1.39 | ||
| P/FCF | 11.08 | ||
| P/OCF | 3.6 | ||
| P/B | 1.79 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.59 |
EPS(TTM)0.78
EY9.74%
EPS(NY)0.93
Fwd EY11.61%
FCF(TTM)0.72
FCFY9.02%
OCF(TTM)2.23
OCFY27.78%
SpS5.78
BVpS4.49
TBVpS-7.03
PEG (NY)0.74
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.12% | ||
| ROE | 13.18% | ||
| ROCE | 8.33% | ||
| ROIC | 6.23% | ||
| ROICexc | 6.27% | ||
| ROICexgc | 18.66% | ||
| OM | 25.15% | ||
| PM (TTM) | 10.23% | ||
| GM | 82.71% | ||
| FCFM | 12.5% |
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-Score8
Asset Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.98 | ||
| Debt/FCF | 12.59 | ||
| Debt/EBITDA | 2.91 | ||
| Cap/Depr | 94.65% | ||
| Cap/Sales | 25.98% | ||
| Interest Coverage | 3.31 | ||
| Cash Conversion | 73.15% | ||
| Profit Quality | 122.17% | ||
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.64 | ||
| Altman-Z | 0.58 |
F-Score8
WACC7.95%
ROIC/WACC0.78
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 Y13.97%
EPS Next 2Y12.88%
EPS Next 3Y13.08%
EPS Next 5YN/A
Revenue 1Y (TTM)5.28%
Revenue growth 3Y-2.64%
Revenue growth 5Y-0.9%
Sales Q2Q%4.8%
Revenue Next Year4.5%
Revenue Next 2Y4.56%
Revenue Next 3Y4.73%
Revenue Next 5YN/A
EBIT growth 1Y9.06%
EBIT growth 3Y185.05%
EBIT growth 5Y29.39%
EBIT Next Year117.84%
EBIT Next 3Y34.46%
EBIT Next 5Y25.29%
FCF growth 1Y133.46%
FCF growth 3Y76.31%
FCF growth 5Y4.03%
OCF growth 1Y13.7%
OCF growth 3Y4.54%
OCF growth 5Y0.13%