NYSE:ADT

Stock Analysis Report

Executive Summary

ADT Inc. provides security and automation solutions for homes and businesses in the United States and Canada.

Snowflake

Fundamentals

Fair value with imperfect balance sheet.


Similar Companies

Share Price & News

How has ADT's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

7.7%

ADT

2.0%

US Commercial Services

3.4%

US Market


1 Year Return

-13.3%

ADT

14.4%

US Commercial Services

5.4%

US Market

Return vs Industry: ADT underperformed the US Commercial Services industry which returned 14.4% over the past year.

Return vs Market: ADT underperformed the US Market which returned 5.4% over the past year.


Shareholder returns

ADTIndustryMarket
7 Day7.7%2.0%3.4%
30 Day11.4%2.1%-1.0%
90 Day9.8%0.5%-0.4%
1 Year-11.3%-13.3%18.8%14.4%7.7%5.4%
3 Yearn/a70.0%58.4%46.2%36.8%
5 Yearn/a103.0%82.7%65.6%47.5%

Price Volatility Vs. Market

How volatile is ADT's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is ADT undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: ADT ($6.74) is trading below our estimate of fair value ($14.79)

Significantly Undervalued: ADT is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ADT is unprofitable, so we can't compare its PE Ratio to the Commercial Services industry average.

PE vs Market: ADT is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

Low PEG Ratio: Insufficient data to calculate ADT's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: ADT is good value based on its PB Ratio (1.3x) compared to the US Commercial Services industry average (1.8x).


Next Steps

Future Growth

How is ADT forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

36.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ADT is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: ADT is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: ADT is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: ADT's revenue (4.1% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: ADT's revenue (4.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: ADT's Return on Equity is forecast to be low in 3 years time (7.1%).


Next Steps

Past Performance

How has ADT performed over the past 5 years?

-10.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: ADT is unprofitable, and losses have increased over the past 5 years at a rate of -10% per year.

Accelerating Growth: Unable to compare ADT's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: ADT is unprofitable, making it difficult to compare its past year earnings growth to the Commercial Services industry (-2.4%).


Return on Equity

High ROE: ADT has a negative Return on Equity (-14.28%), as it is currently unprofitable.


Return on Assets

ROA vs Industry: ADT is currently unprofitable, so its Return on Assets is negative.


Return on Capital Employed

ROCE Improving: ADT is currently unprofitable, so its Return on Capital Employed is negative.


Next Steps

Financial Health

How is ADT's financial position?


Financial Position Analysis

Short Term Liabilities: ADT's short term assets ($582.5M) do not cover its short term liabilities ($1.4B)

Long Term Liabilities: ADT's short term assets (582.5M) do not cover its long term liabilities (11.7B)


Debt to Equity History and Analysis

Debt Level: ADT's debt to equity ratio (250.1%) is considered high

Reducing Debt: Insufficient data to determine if ADT's debt to equity ratio has reduced over the past 5 years.


Balance Sheet

Inventory Level: ADT has a high level of physical assets or inventory.

Debt Coverage by Assets: ADT's debt is not covered by short term assets (assets are 0.1x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable ADT has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: ADT is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 92.1% per year.


Next Steps

Dividend

What is ADT's current dividend yield, its reliability and sustainability?

2.08%

Current Dividend Yield


Dividend Yield vs Market

company2.1%marketbottom25%1.5%markettop25%3.8%industryaverage1.6%forecastin3Years2.3%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: ADT's dividend (2.08%) is higher than the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: ADT's dividend (2.08%) is low compared to the top 25% of dividend payers in the US market (3.77%).

Stable Dividend: Whilst dividend payments have been stable, ADT has been paying a dividend for less than 10 years.

Growing Dividend: ADT has only been paying a dividend for 2 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: ADT is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: ADT's dividends in 3 years are forecast to be thoroughly covered by earnings (14.9% payout ratio).


Next Steps

Management

What is the CEO of ADT's salary, the management and board of directors tenure and is there insider trading?

1.0yrs

Average management tenure


CEO

Jim DeVries (56yo)

0.8yrs

Tenure

US$17,942,615

Compensation

Mr. James D. DeVries, also known as Jim, has been the President at ASG Intermediate Holding Corp. since September 2017. Mr. DeVries has been Chief Executive Officer of ADT Inc. since December 1, 2018 and P ...


CEO Compensation Analysis

Compensation vs. Market: Insufficient data to establish whether Jim's total compensation is reasonable compared to companies of similar size in the US market.

Compensation vs Earnings: Jim's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

1.0yrs

Average Tenure

48yo

Average Age

Experienced Management: ADT's management team is not considered experienced ( 1 years average tenure), which suggests a new team.


Board Age and Tenure

3.8yrs

Average Tenure

48yo

Average Age

Experienced Board: ADT's board of directors are considered experienced (3.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown


Management Team

  • Dan Bresingham (47yo)

    Executive Vice President of Commercial

    • Tenure: 0yrs
    • Compensation: US$9.98m
  • Don Young (54yo)

    Executive VP of Field Operations & Chief Information Officer

    • Tenure: 0yrs
    • Compensation: US$9.99m
  • Jamie Rosand Haenggi (49yo)

    Chief Customer Officer

    • Tenure: 0yrs
    • Compensation: US$8.54m
  • Jeff Likosar (48yo)

    Executive VP

    • Tenure: 1.6yrs
    • Compensation: US$11.62m
  • Amelia Pulliam (47yo)

    Senior VP & Chief Human Resources Officer

    • Tenure: 3.2yrs
  • Zachary Susil (36yo)

    VP, Controller & Chief Accounting Officer

    • Tenure: 0.5yrs
  • Jim DeVries (56yo)

    CEO, President & Director

    • Tenure: 0.8yrs
    • Compensation: US$17.94m
  • Jochen Koedijk (39yo)

    Chief Marketing Officer

    • Tenure: 1.3yrs
  • Jason Smith

    Senior Vice President of Finance & Investor Relations

    • Tenure: 0yrs
  • David Smail (53yo)

    Executive VP

    • Tenure: 0.7yrs

Board Members

  • Marc Becker (47yo)

    Chairman

    • Tenure: 0yrs
  • Eric Press (53yo)

    Director

    • Tenure: 3.8yrs
  • Stephanie Drescher (46yo)

    Director

    • Tenure: 2.8yrs
  • Matt Winter (62yo)

    Director

    • Tenure: 1.6yrs
    • Compensation: US$192.75k
  • Matt Nord (40yo)

    Director

    • Tenure: 3.8yrs
  • David Ryan (49yo)

    Director

    • Tenure: 3.8yrs
  • Reed Rayman (33yo)

    Director

    • Tenure: 3.8yrs
  • Tracey Griffin (54yo)

    Director

    • Tenure: 0.9yrs
    • Compensation: US$114.40k
  • Lee Solomon (47yo)

    Director

    • Tenure: 3.8yrs
  • Jim DeVries (56yo)

    CEO, President & Director

    • Tenure: 0.8yrs
    • Compensation: US$17.94m

Company Information

ADT Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ADT Inc.
  • Ticker: ADT
  • Exchange: NYSE
  • Founded: 1874
  • Industry: Security and Alarm Services
  • Sector: Commercial Services
  • Market Cap: US$5.056b
  • Shares outstanding: 750.10m
  • Website: https://www.adt.com

Number of Employees


Location

  • ADT Inc.
  • 1501 Yamato Road
  • Boca Raton
  • Florida
  • 33431
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ADTNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 2018
541DB (Deutsche Boerse AG)YesCommon StockDEEURJan 2018

Biography

ADT Inc. provides security and automation solutions for homes and businesses in the United States and Canada. It provides a range of fire detection, fire suppression, video surveillance, and access control ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/16 00:43
End of Day Share Price2019/10/15 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.