ADT INC (ADT)
US00090Q1031 - Common Stock
Overall ADT gets a fundamental rating of 4 out of 10. We evaluated ADT against 65 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. ADT has a bad growth rate and is valued cheaply. ADT also has an excellent dividend rating.
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.
In the past 5 years ADT always reported a positive cash flow from operatings.
1.2 Ratios
ADT's Return On Assets of 4.22% is fine compared to the rest of the industry. ADT outperforms 76.56% of its industry peers.
ADT has a Return On Equity of 18.03%. This is amongst the best in the industry. ADT outperforms 89.06% of its industry peers.
The Return On Invested Capital of ADT (5.87%) is better than 73.44% 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 14.93%.
The 3 year average ROIC (3.10%) for ADT is below the current ROIC(5.87%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.22% | ||
| ROE | 18.03% | ||
| ROIC | 5.87% |
ROA(3y)0.54%
ROA(5y)-0.99%
ROE(3y)1.88%
ROE(5y)-5.7%
ROIC(3y)3.1%
ROIC(5y)2.41%
1.3 Margins
With an excellent Profit Margin value of 12.80%, ADT belongs to the best of the industry, outperforming 89.06% of the companies in the same industry.
The Operating Margin of ADT (21.96%) is better than 85.94% 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 77.87%, ADT belongs to the top of the industry, outperforming 92.19% of the companies in the same industry.
In the last couple of years the Gross Margin of ADT has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.96% | ||
| PM (TTM) | 12.8% | ||
| GM | 77.87% |
OM growth 3Y73.95%
OM growth 5Y22.41%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y3.73%
GM growth 5Y0.64%
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.
ADT has more shares outstanding than it did 1 year ago.
The number of shares outstanding for ADT has been increased compared to 5 years ago.
Compared to 1 year ago, ADT has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.52, we must say that ADT is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.52, ADT is in line with its industry, outperforming 42.19% of the companies in the same industry.
ADT has a debt to FCF ratio of 22.22. This is a negative value and a sign of low solvency as ADT would need 22.22 years to pay back of all of its debts.
ADT has a Debt to FCF ratio (22.22) which is in line with its industry peers.
ADT has a Debt/Equity ratio of 2.03. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of ADT (2.03) is worse than 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.03 | ||
| Debt/FCF | 22.22 | ||
| Altman-Z | 0.52 |
ROIC/WACC0.74
WACC7.92%
2.3 Liquidity
A Current Ratio of 0.71 indicates that ADT may have some problems paying its short term obligations.
ADT has a Current ratio of 0.71. This is amonst the worse of the industry: ADT underperforms 81.25% of its industry peers.
ADT has a Quick Ratio of 0.71. 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 0.56, ADT is doing worse than 84.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.56 |
3. Growth
3.1 Past
ADT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 71.05%, which is quite impressive.
The Earnings Per Share has been decreasing by -7.07% on average over the past years.
Looking at the last year, ADT shows a decrease in Revenue. The Revenue has decreased by -5.43% in the last year.
ADT shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.69% yearly.
EPS 1Y (TTM)71.05%
EPS 3Y-16.02%
EPS 5Y-7.07%
EPS growth Q2Q33.33%
Revenue 1Y (TTM)-5.43%
Revenue growth 3Y-2.13%
Revenue growth 5Y1.69%
Revenue growth Q2Q-25%
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 13.37% on average per year.
The Revenue is expected to decrease by -0.84% on average over the next years.
EPS Next Y-4.38%
EPS Next 2Y8.86%
EPS Next 3Y13.37%
EPS Next 5YN/A
Revenue Next Year-10.37%
Revenue Next 2Y-3.44%
Revenue Next 3Y-0.84%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 10.23 indicates a reasonable valuation of ADT.
Based on the Price/Earnings ratio, ADT is valued cheaper than 89.06% of the companies in the same industry.
ADT is valuated cheaply when we compare the Price/Earnings ratio to 28.06, which is the current average of the S&P500 Index.
ADT is valuated reasonably with a Price/Forward Earnings ratio of 9.20.
92.19% of the companies in the same industry are more expensive than ADT, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 20.72. ADT is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.23 | ||
| Fwd PE | 9.2 |
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 87.50% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, ADT is valued a bit cheaper than the industry average as 76.56% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.05 | ||
| EV/EBITDA | 5.53 |
4.3 Compensation for Growth
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 13.37% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y8.86%
EPS Next 3Y13.37%
5. Dividend
5.1 Amount
ADT has a Yearly Dividend Yield of 3.38%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 33.29, ADT pays a better dividend. On top of this ADT pays more dividend than 96.88% of the companies listed in the same industry.
ADT's Dividend Yield is a higher than the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.38% |
5.2 History
On average, the dividend of ADT grows each year by 6.03%, which is quite nice.
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)6.03%
Div Incr Years0
Div Non Decr Years3
5.3 Sustainability
ADT pays out 19.13% of its income as dividend. This is a sustainable payout ratio.
The dividend of ADT is growing, but earnings are growing more, so the dividend growth is sustainable.
DP19.13%
EPS Next 2Y8.86%
EPS Next 3Y13.37%
ADT INC
NYSE:ADT (5/2/2024, 4:40:50 PM)
After market: 6.65 0 (0%)6.65
+0.15 (+2.31%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap6.05B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.38% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
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EPS NY rev (3m)
Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.23 | ||
| Fwd PE | 9.2 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.22% | ||
| ROE | 18.03% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 21.96% | ||
| PM (TTM) | 12.8% | ||
| GM | 77.87% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.03 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.56 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)71.05%
EPS 3Y-16.02%
EPS 5Y
EPS growth Q2Q
EPS Next Y-4.38%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-5.43%
Revenue growth 3Y-2.13%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
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