ADT - Yearly Recap

ADT shares moved 7.7% over the last 52 weeks, with a high of $10.1 and a low of $6. During this time, the stock underperformed the S&P 500 index by 27.7%. As of January 2022, the company's 50-day average price is $9.0. ADT Inc. provides security, automation, and smart home solutions to consumer and business customers in the United States. The mid-cap Industrials company has 25,000 full time employees and is based in Boca Raton, FL. ADT has returned a 1.5% dividend yield over the last 12 months.

The Business Is Unprofitable and Its Balance Sheet Is Highly Leveraged:

2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $5,126 $5,315 $5,307
Revenue Growth n/a 3.69% -0.14%
Gross Margins 72.9% 71.5% 70.8%
Gross Margins Growth n/a -1.92% -0.98%
Operating Margins 6.6% 3.0% 1.0%
Operating Margins Growth n/a -54.55% -66.67%
Earnings Per Share -$0.57 -$0.82 -$0.41
EPS Growth n/a -43.86% 50.0%
Free Cash Flow (MM) $1,172 $791 $787
FCF Growth n/a -32.49% -0.56%
Capital Expenditures (MM) -$701 -$576 -$863
Net Debt / EBITDA 4.13 4.46 4.91

ADT Has an Attractive P/B Ratio but a Worrisome P/E Ratio:

Compared to the Industrials sector's average of 21.46, ADT has a trailing twelve month price to earnings (P/E) ratio of -31.8 and, based on its EPS guidance of 0.76, an expected P/E ratio of 11.9.

The firm's price to earnings growth (PEG) is 4.63, which indicates that it is overvalued in terms of its expected rate of earnings growth.

ADT is undervalued in terms of its assets because its price to book (P/B) ratio is 2.6 compared to its sector average of 3.7.

ADT Has an Analyst Consensus of Some Upside Potential but a Small Amount of Insider Shareholders:

6 analysts are following ADT and have set target prices ranging from $8 to $13 per share. On average, they have given the company a rating of buy. At the current price of $9.07, ADT is trading -9.3% away from its average analyst target price of $10 per share, implying an analyst consensus of some upside potential for the stock.

The company has an average amount of shares sold short since 3.0% of the company's shares are tied to short positions. Institutions own 106.3% of ADT's shares, while the insider ownership rate stands at 1.03%. The biggest shareholder is Apollo Management Holdings, L.P. with a 71% stake in the company worth approximately $5,522,975,177.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.