Adt (ADT) AI Stock Analysis

• Market Cap: $6.57B
• Dividend Yield: 2.73%
• Average Volume (3M): 12.18M
• Price to Earnings (P/E): 11.4
• Beta (1Y): 0.75
• Revenue Growth: 4.77%
• EPS Growth: -22.78%
• Country: US
• Employees: 12,800
• Sector: Industrials
• Sector Strength: 72
• Industry: Security & Protection Services
• EPS (TTM): 0.23
• Shares Outstanding: 765,018,200
• 10 Day Avg. Volume: 6,730,389
• 30 Day Avg. Volume: 12,179,329
• PEG Ratio: 1.27
• Price to Book (P/B): 1.64
• Price to Sales (P/S): 1.27
• P/FCF Ratio: 3.62
• Enterprise Value/Market Cap: 2.11
• Enterprise Value/Revenue: 2.71
• Enterprise Value/Gross Profit: 3.35
• Enterprise Value/Ebitda: 5.68
• 1Y Price Target: $9.00
• Price Target Upside: 12.22% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2
• EPS Forecast (FY): 0.92
• Revenue Forecast (FY): $5.31B

• Rating: 70 Outperform
• Price Target: $9.00 ▲(12.22% Upside)
• Action: Upgraded Date: 03/02/26
• Date: Action: Upgraded 03/02/26

The score is driven primarily by improved profitability and strong free cash flow, supported by reasonable valuation. Offsetting factors include high leverage and only neutral-to-mixed technical momentum, while the earnings update and recent corporate actions are broadly positive but tempered by higher attrition and softer subscriber adds.

Positive Factors

Strong free cash flow

Sustained, large free cash flow provides durable financial flexibility: it supports debt servicing, dividends, and the $1.5B repurchase plan while funding product investment. High cash conversion (FCF ≈86% of net income TTM) underpins capital allocation through cycles.

Recurring subscription revenue model

A subscription-heavy business yields predictable, recurring revenue and high customer lifetime value, supporting margin sustainability and smoother cash flow. This structural model reduces volatility versus one-time sales and allows disciplined acquisition spend tied to long-term payback profiles.

Strategic AI sensing acquisition & partnerships

Origin AI adds proprietary ambient sensing and >200 patents, strengthening product differentiation, reducing false alarms, and enabling privacy-first features and aging-in-place use cases. The Verisure licensing deal and planned 2027 commercialization create scale and potential new revenue/licensing streams.

Negative Factors

Elevated leverage

A meaningfully debt-heavy balance sheet limits strategic flexibility and raises interest-rate sensitivity. High leverage constrains M&A and capital expenditure optionality, forces prioritization of debt paydown vs. growth investments, and leaves less cushion if operating trends soften.

Rising attrition

Higher customer churn directly erodes the core subscription base and lifetime value, forcing higher acquisition spend to sustain growth. For a subscription-led model, persistently elevated attrition pressures margins, cash conversion, and the long-term unit economics that fund returns to shareholders.

Weaker subscriber additions / partner execution

Reliance on bulk partner channels creates lumpy, concentration-risk exposure when partnerships underperform. Lower new-subscriber volumes slow recurring revenue scale and make it harder to hit multi-year revenue and EPS growth targets without sustained improvement in acquisition efficiency.

Adt Business Overview & Revenue Model

Company Description

ADT Inc. provides security, automation, and smart home solutions to consumer and business customers in the United States. It provides a range of fire detection, fire suppression, video surveillance, and access control systems to residential, commercial, and multi-site customers. The company primarily offers monitored security and automation solutions, including the installation and monitoring of security and premises automation systems designed to detect intrusion, control access, sense movement, smoke, fire, carbon monoxide, flooding, temperature, and other environmental conditions and hazards; and address personal emergencies, such as injuries, medical emergencies, or incapacitation. It also provides interactive and smart home solutions that allow customers to use their smart phones, tablets, and laptops to arm and disarm their security systems, adjust lighting or thermostat levels, and view real-time video of their premises; and creates customized and automated schedules for managing lights, thermostats, appliances, garage doors, cameras, and other connected devices, as well as offers monitoring and maintenance services. The company offers its products under the ADT, ADT Pulse, Protection 1, ADT Commercial, and Blue by ADT names. It operates through a network of approximately 250 sales and service offices, as well as three regional distribution centers, which are supported by 17 multi-use sales, customer, and field support locations housing its nine UL-listed monitoring centers and four national sales centers. The company was formerly known as Prime Security Services Parent, Inc. and changed its name to ADT Inc. in September 2017. ADT Inc. was founded in 1874 and is headquartered in Boca Raton, Florida.

How the Company Makes Money

ADT generates revenue primarily through subscription-based monitoring services, which provide customers with 24/7 security monitoring. The company charges a monthly fee for these services, which can vary based on the specific features and level of service chosen by the customer. Additionally, ADT earns revenue from the sale and installation of security equipment, including cameras, alarms, and smart home devices. Upselling and cross-selling of additional services, such as home automation and video monitoring, also contribute to the company's earnings. Strategic partnerships with companies in technology and home services sectors further enhance ADT's revenue opportunities, allowing for bundled offerings and expanded market reach.

Adt Financial Statement Overview

Summary

Strong profitability and cash generation support the score: TTM net margin is ~12.5% and free cash flow is strong (~$1.71B) with ~86% growth. The main offset is a debt-heavy balance sheet (TTM debt-to-equity ~2.13x) and some historical earnings volatility.

Income Statement

Profitability has improved materially versus prior years: TTM (Trailing-Twelve-Months) net margin is strong (~12.5%) following losses in 2020–2021 and a loss in 2023, and EBIT margin is healthy (~24%). Revenue growth also re-accelerated in TTM (~31%) after modest growth in 2024 and a decline in 2023. Offsetting positives, gross margin in TTM is slightly lower than 2023–2024, and the earnings profile has shown volatility over the last several years.

Balance Sheet

Leverage remains the key constraint: TTM debt-to-equity is elevated (~2.13x) and has been consistently high historically (roughly ~2.1x–3.1x). On the positive side, equity has been relatively stable (~$3.8B TTM) and returns on equity improved to ~17% TTM (up from ~13% in 2024 and negative in 2023), signaling better profitability. Still, the balance sheet remains meaningfully debt-heavy, which can limit flexibility if operating conditions soften.

Cash Flow

Cash generation is a clear strength: TTM operating cash flow is solid (~$1.88B) and free cash flow is strong (~$1.71B), with very large TTM free-cash-flow growth (~86%) following a major rebound in 2024. Cash conversion is reasonable, with free cash flow running at ~86% of net income TTM, supporting debt service and reinvestment capacity. A watch item is that operating cash flow relative to earnings has eased versus 2024, even though it remains healthy.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.13B	4.90B	4.65B	5.17B	5.31B	5.31B
Gross Profit	4.15B	2.48B	2.38B	2.20B	1.72B	1.79B
EBITDA	2.44B	2.80B	2.69B	2.52B	2.25B	1.94B
Net Income	595.56M	501.05M	-166.97M	132.66M	-340.82M	-632.19M
Balance Sheet
Total Assets	15.82B	16.05B	15.96B	17.87B	16.89B	16.12B
Cash, Cash Equivalents and Short-Term Investments	81.00M	204.06M	14.62M	257.00M	24.00M	205.00M
Total Debt	7.69B	7.81B	7.84B	9.83B	9.69B	9.52B
Total Liabilities	12.04B	12.25B	12.18B	14.44B	13.64B	13.08B
Stockholders Equity	3.78B	3.80B	3.79B	3.43B	3.25B	3.04B
Cash Flow
Free Cash Flow	1.71B	1.72B	850.84M	976.00M	787.00M	792.00M
Operating Cash Flow	1.88B	1.88B	1.66B	1.89B	1.65B	1.37B
Investing Cash Flow	-1.12B	-1.30B	242.49M	-1.53B	-1.70B	-1.14B
Financing Cash Flow	-862.04M	-515.36M	-2.14B	-15.00M	-128.45M	-70.00M

Adt Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 8.02
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADT, the sentiment is Neutral. The current price of 8.02 is above the 20-day moving average (MA) of 7.90, below the 50-day MA of 8.04, and below the 200-day MA of 8.28, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 52.39 is Neutral, neither overbought nor oversold. The STOCH value of 90.61 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ADT.

Adt Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NSSC	78 Outperform	$1.66B	35.32	26.42%	1.29%	-2.28%	-9.94%
ALLE	72 Outperform	$13.88B	21.68	36.08%	1.27%	6.87%	13.53%
ARLO	71 Outperform	$1.66B	115.62	13.05%	―	-2.83%	―
ADT	70 Outperform	$6.57B	11.45	17.24%	2.73%	4.77%	-22.78%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BCO	60 Neutral	$4.81B	24.85	86.51%	0.85%	3.07%	48.57%
REZI	56 Neutral	$5.85B	-9.60	-16.93%	―	15.45%	-488.24%

Adt Corporate Events

ADT Highlights 2025 Results and New Share Repurchase Plan

On March 2, 2026, ADT Inc. reported its fourth-quarter and full-year 2025 results, highlighting a 5% rise in annual revenue to $5.1 billion, solid recurring revenue metrics, and stronger adjusted earnings and free cash flow despite modest declines in GAAP income. The company detailed ongoing innovation in its ADT+ smart home platform, AI-based ambient sensing via the Origin AI acquisition, operational efficiencies, and index inclusion in the S&P SmallCap 600, while also noting it returned $791 million to shareholders in 2025 through buybacks and dividends and declared a $0.055 per-share dividend payable April 2, 2026 to holders of record on March 12, 2026, alongside a new $1.5 billion share repurchase authorization running through April 30, 2029, underscoring a strategy of sustained capital returns and balance-sheet optimization.

The newly approved three-year, $1.5 billion repurchase plan and ongoing refinancings are designed to unlock shareholder value by leveraging strong cash generation and a lower 4.3% average cost of debt. These moves, combined with product innovation, efficiency gains, and increased market visibility from index inclusion, reinforce ADT’s competitive positioning in the smart home security market and signal continued emphasis on shareholder-friendly capital allocation.

The most recent analyst rating on (ADT) stock is a Hold with a $9.00 price target. To see the full list of analyst forecasts on Adt stock, see the ADT Stock Forecast page.

ADT Acquires Origin AI to Expand Smart Home Sensing

On February 24, 2026, ADT Inc. acquired Origin Wireless, Inc., known as Origin AI, for $170 million in cash, bringing its AI-enabled Wi-Fi sensing platform and more than 200 global patents into the ADT ecosystem. Origin’s technology, which detects motion and human presence without cameras, audio, or wearables, is intended to deepen ADT’s capabilities in contextual home monitoring, aging-in-place applications, and smarter automation while reducing false alarms and strengthening privacy.

On the same date, ADT announced a long-term commercial agreement under which Verisure will continue to license Origin AI’s sensing technology, a deal valued at a minimum of $30 million over five years plus per-household activation fees. The acquisition and Verisure agreement collectively position ADT to scale Origin’s platform across millions of homes, enhance its industry standing in intelligent home protection, and support the rollout of new offerings expected to enter the market in 2027, with potential benefits for customers, first responders, and municipal compliance.

The most recent analyst rating on (ADT) stock is a Buy with a $9.50 price target. To see the full list of analyst forecasts on Adt stock, see the ADT Stock Forecast page.