Adt (ADT) AI Stock Analysis

• Market Cap: $7.23B
• Dividend Yield: 2.53%
• Average Volume (3M): 12.37M
• Price to Earnings (P/E): 13.0
• Beta (1Y): 0.78
• Revenue Growth: 3.80%
• EPS Growth: -3.18%
• Country: US
• Employees: 12,800
• Sector: Industrials
• Sector Strength: 73
• Industry: Security & Protection Services
• EPS (TTM): 0.23
• Shares Outstanding: 776,526,800
• 10 Day Avg. Volume: 10,258,734
• 30 Day Avg. Volume: 12,369,912
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.12
• Enterprise Value/Revenue: 3.08
• Enterprise Value/Gross Profit: 4.15
• Enterprise Value/Ebitda: 5.67
• 1Y Price Target: $9.38
• Price Target Upside: 7.82% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 78 Outperform
• Price Target: $10.00 ▲(14.94% Upside)

ADT's strong earnings call performance and positive technical indicators are the most significant factors driving the score. The company's robust cash flow and profitability metrics further support its financial health, despite concerns about revenue growth consistency and high leverage. The valuation is reasonable, adding to the stock's attractiveness.

Positive Factors

AI and Efficiency

AI deployment in call centers has led to increased efficiency and potential cost savings, with 90% of customer service chats processed by AI agents.

Revenue Growth

Revenue growth of 7.4% came in ahead of expectations, driven by record-level recurring monthly revenue, improved pricing, and better retention rates.

Share Repurchase

A new $500 million share-repurchase program was announced, indicating confidence in the company's financial health and future prospects.

Negative Factors

Gross Attrition

Gross attrition worsened due to the loss of a large customer who represented half of total voluntary losses.

Investments Impact

Adjusted EBITDA and margins were below expectations due to investments in innovation and long-term objectives.

Tariff Impact

Tariffs could lead to higher equipment costs, however ADT may be able to mitigate the impact via supplier negotiations, inventory management, buying forward, and even potentially implementing a tariff charge for new customers.

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, where customers pay a monthly fee for security system monitoring. This includes services such as intrusion detection, fire and carbon monoxide monitoring, and video surveillance. Additionally, ADT earns revenue from the sale and installation of security equipment, which includes cameras, sensors, and smart home devices. The company also benefits from ongoing service contracts and upselling additional features to existing customers. Strategic partnerships with technology providers and integrations with smart home platforms further enhance its offerings and revenue potential. Overall, the recurring revenue model from subscriptions combined with equipment sales and service contracts constitutes the core of ADT's financial performance.

Adt Financial Statement Overview

Summary

ADT exhibits strong profitability metrics, with improving EBIT and EBITDA margins. However, the high debt-to-equity ratio suggests potential financial risk. Cash flow generation is robust, supporting liquidity and operational efficiency. While profitability is improving, revenue growth needs attention to ensure sustained financial health.

Income Statement

The company has shown a consistent improvement in its EBIT and EBITDA margins, reaching 24.9% and 46.6% TTM (Trailing-Twelve-Months), respectively. The gross profit margin remains robust at 74.2% TTM. However, the revenue growth has been inconsistent, with a significant drop in 2022, and the net profit margin has fluctuated, although it improved to 11.1% TTM.

Balance Sheet

ADT's debt-to-equity ratio has decreased slightly but remains high, indicating a leveraged position. The return on equity improved to 15.2% TTM, reflecting better profitability. The equity ratio is relatively stable at 22.8% TTM, suggesting moderate financial leverage.

Cash Flow

Free cash flow growth is volatile, with a decline in the latest period, and the free cash flow to net income ratio is strong at 2.61 TTM, indicating solid cash conversion. The operating cash flow to net income ratio is 3.62, showing efficient cash generation from operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.98B	4.90B	4.65B	4.38B	4.20B	5.32B
Gross Profit	3.69B	4.05B	3.90B	3.68B	3.76B	3.80B
EBITDA	2.70B	2.60B	2.56B	2.36B	1.96B	1.94B
Net Income	549.75M	501.05M	463.01M	132.66M	-341.00M	-632.00M
Balance Sheet
Total Assets	15.83B	16.05B	15.96B	17.87B	16.89B	16.12B
Cash, Cash Equivalents and Short-Term Investments	3.74M	96.21M	14.62M	257.00M	24.00M	205.00M
Total Debt	7.82B	7.71B	7.94B	9.91B	9.69B	9.64B
Total Liabilities	12.21B	12.25B	12.18B	14.44B	13.64B	13.08B
Stockholders Equity	3.62B	3.80B	3.79B	3.43B	3.25B	3.04B
Cash Flow
Free Cash Flow	1.44B	1.72B	850.84M	976.00M	787.00M	792.00M
Operating Cash Flow	1.99B	1.88B	1.66B	1.89B	1.65B	1.37B
Investing Cash Flow	-1.25B	-1.30B	242.49M	-1.53B	-1.70B	-1.14B
Financing Cash Flow	-761.62M	-515.36M	-2.14B	-15.00M	-128.00M	-70.00M

Adt Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8.70
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADT, the sentiment is Positive. The current price of 8.7 is above the 20-day moving average (MA) of 8.67, above the 50-day MA of 8.53, and above the 200-day MA of 7.88, indicating a bullish trend. The MACD of 0.06 indicates Positive momentum. The RSI at 52.80 is Neutral, neither overbought nor oversold. The STOCH value of 56.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ADT.

Adt Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALLE	79 Outperform	$14.75B	23.87	38.99%	1.15%	5.49%	14.46%
ADT	78 Outperform	$7.23B	13.03	17.13%	2.53%	3.80%	-3.18%
REZI	75 Outperform	$5.32B	64.31	-26.27%	―	20.00%	-547.75%
NSSC	73 Outperform	$1.41B	33.23	24.98%	1.30%	-3.81%	-11.48%
BCO	67 Neutral	$4.78B	30.73	56.23%	0.87%	2.17%	25.34%
ARLO	65 Neutral	$1.89B	―	-6.45%	―	-1.75%	68.19%
Sector *	64 Neutral	$10.73B	15.74	7.60%	2.01%	2.75%	-15.09%

Adt Corporate Events

ADT Enters Credit Agreement Amendment for $550M Loan

On July 25, 2025, ADT Inc.’s subsidiaries entered into a Credit Agreement Amendment, resulting in $550 million in incremental first lien senior secured term B-2 loans. These funds are intended to redeem $550 million of the 5.750% senior secured notes due in 2026. Additionally, on July 24, 2025, ADT and affiliates of Apollo Global Management entered into an underwriting agreement for the sale of 71 million shares of common stock, with a share repurchase of over 11 million shares by ADT. The offering and repurchase are set to close on July 28, 2025.

ADT Reports Strong Q2 2025 Financial Results

On July 24, 2025, ADT Inc. announced its second-quarter results for 2025, highlighting a 7% increase in total revenue to $1.3 billion and a record-high recurring monthly revenue. The company reported strong financial performance with a 33% rise in GAAP income from continuing operations, and significant cash flow generation, reflecting effective strategy execution. ADT also declared a $0.055 per share dividend to be paid on October 2, 2025, and continued its share repurchase program, buying back 12 million shares in the second quarter. The company remains on track to meet its 2025 financial targets, driven by the adoption of its ADT+ platform and strategic initiatives like the bulk purchase of customer accounts.

Marques Coleman Retires from ADT Board of Directors

On May 31, 2025, Marques Coleman retired from his position as a Class II director on the Board of Directors of ADT Inc., a role he held as a designee of funds managed by Apollo Global Management, Inc. His retirement was not due to any disagreements with the company or its board, nor related to the company’s operations, policies, or practices.

ADT Inc. Holds Annual Stockholders Meeting

On May 21, 2025, ADT Inc. held its annual stockholders meeting where several key proposals were voted upon. The stockholders elected Marques Coleman, Paul J. Smith, Matthew E. Winter, and Suzanne Yoon as Class II directors for a three-year term. They also approved the executive compensation, an amendment to declassify the board, a special meeting amendment, and ratified PricewaterhouseCoopers LLP as the independent accounting firm for 2025.