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%)
ADT gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 77 industry peers in the Diversified Consumer Services industry. While ADT has a great profitability rating, there are quite some 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.
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.
ADT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ADT's Return On Assets of 4.01% is fine compared to the rest of the industry. ADT outperforms 63.64% of its industry peers.
With an excellent Return On Equity value of 17.51%, ADT belongs to the best of the industry, outperforming 81.82% of the companies in the same industry.
ADT's Return On Invested Capital of 6.65% is fine compared to the rest of the industry. ADT outperforms 70.13% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ADT is below the industry average of 9.42%.
The last Return On Invested Capital (6.65%) for ADT is above the 3 year average (5.35%), which is a sign of increasing profitability.
| 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
Looking at the Profit Margin, with a value of 12.53%, ADT is in the better half of the industry, outperforming 76.62% of the companies in the same industry.
The Operating Margin of ADT (25.25%) is better than 94.81% of its industry peers.
In the last couple of years the Operating Margin of ADT has grown nicely.
ADT has a Gross Margin of 80.92%. This is amongst the best in the industry. ADT outperforms 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
ADT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, ADT has less shares outstanding
Compared to 5 years ago, ADT has more shares outstanding
ADT has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.62, we must say that ADT is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 0.62, ADT perfoms like the industry average, outperforming 41.56% of the companies in the same industry.
ADT has a debt to FCF ratio of 9.92. This is a negative value and a sign of low solvency as ADT would need 9.92 years to pay back of all of its debts.
The Debt to FCF ratio of ADT (9.92) is better than 62.34% of its industry peers.
ADT has a Debt/Equity ratio of 1.99. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of ADT (1.99) is worse than 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
WACC6.79%
2.3 Liquidity
A Current Ratio of 0.67 indicates that ADT may have some problems paying its short term obligations.
With a Current ratio value of 0.67, ADT is not doing good in the industry: 77.92% of the companies in the same industry are doing better.
A Quick Ratio of 0.54 indicates that ADT may have some problems paying its short term obligations.
With a Quick ratio value of 0.54, ADT is not doing good in the industry: 80.52% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.54 |
3. Growth
3.1 Past
ADT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.54%, which is quite good.
ADT shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.53% yearly.
The Revenue has been growing slightly by 5.20% in the past 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
The Earnings Per Share is expected to grow by 15.93% on average over the next years. This is quite good.
The Revenue is expected to grow by 4.73% on average over the next years.
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
ADT is valuated reasonably with a Price/Earnings ratio of 9.48.
85.71% of the companies in the same industry are more expensive than ADT, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.31, ADT is valued rather cheaply.
ADT is valuated reasonably with a Price/Forward Earnings ratio of 8.29.
Based on the Price/Forward Earnings ratio, ADT is valued cheaper than 92.21% of the companies in the same industry.
ADT is valuated cheaply when we compare the Price/Forward Earnings ratio to 36.59, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.48 | ||
| Fwd PE | 8.29 |
4.2 Price Multiples
84.42% of the companies in the same industry are more expensive than ADT, based on the Enterprise Value to EBITDA ratio.
93.51% of the companies in the same industry are more expensive than ADT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.72 | ||
| EV/EBITDA | 5.46 |
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 15.93% in the coming years. This may justify a more expensive valuation.
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 2.70%.
ADT's Dividend Yield is rather good when compared to the industry average which is at 2.12. ADT pays more dividend than 96.10% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, ADT has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.7% |
5.2 History
The dividend of ADT decreases each year by -23.00%.
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)-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 Cap6.76B
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 | 2.7% |
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
WACC6.79%
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.