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Adt Inc (ADT)
NYSE:ADT
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Adt (ADT) AI Stock Analysis

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ADT

Adt

(NYSE:ADT)

Rating:76Outperform
Price Target:
$10.00
▲(18.48%Upside)
ADT's overall stock score is driven by strong earnings call highlights, including record recurring revenue, strategic acquisitions, and robust cash flow. The valuation suggests potential undervaluation, adding to its attractiveness. Technical indicators support a positive trend, while financial performance indicates solid profitability despite high leverage. Revenue growth and some operational challenges warrant cautious optimism.
Positive Factors
Efficiency and Cost Savings
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
EBITDA and Margins
Adjusted EBITDA and margins were below expectations, impacted by investments into innovation initiatives.
Tariff Impact
Potential impacts from tariffs could lead to higher equipment costs, although mitigation strategies are being considered.

Adt (ADT) vs. SPDR S&P 500 ETF (SPY)

Adt Business Overview & Revenue Model

Company DescriptionADT Inc. is a leading provider of security and automation solutions for homes and businesses in the United States. The company operates primarily in the electronic security segment, offering a comprehensive suite of products and services including alarm monitoring, video surveillance, access control, and smart home automation. ADT aims to enhance safety and convenience for its customers by integrating advanced technology into its security systems.
How the Company Makes MoneyADT Inc. generates revenue through a combination of product sales and recurring subscription services. The primary revenue stream comes from monitoring and service fees, where customers pay monthly or annual fees for continuous monitoring and support of their security systems. Additionally, ADT earns revenue from the sale and installation of security equipment like cameras, sensors, and control panels. The company also collaborates with various partners to offer integrated smart home solutions, which further contribute to its earnings. ADT's strategic partnerships with telecommunication companies and other technology providers help expand its customer base and increase market penetration, enhancing overall revenue.

Adt Earnings Call Summary

Earnings Call Date:Jul 24, 2025
(Q2-2025)
|
% Change Since: 0.12%|
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
ADT demonstrated strong financial performance with record recurring revenue, increased cash flow, and solid strategic acquisitions. There were challenges, particularly in the State Farm partnership and dealer channel performance, but these were offset by strong cash generation, customer satisfaction, and strategic execution.
Q2-2025 Updates
Positive Updates
Record Recurring Monthly Revenue
ADT reported a record recurring monthly revenue balance of $363 million, up 2% year-over-year.
Total Revenue Growth
ADT achieved a total revenue increase of 7% year-over-year.
Strong Cash Flow
Adjusted free cash flow, including interest rate swaps, was $500 million through the first half of the year, up 38%.
Increased Adjusted Earnings Per Share
Adjusted earnings per diluted share increased by 35% to $0.23.
Customer Retention and Satisfaction
Customer attrition remained solid at 12.8%, and the company achieved a record NPS score in June.
Successful Strategic Acquisition
Completed a strategic customer portfolio acquisition of approximately 50,000 subscribers for $89 million.
Strong Partnership with Google
The Nest Aware subscriber base surpassed 1 million customers, showing strong collaboration and smart home adoption.
AI Adoption in Customer Service
90% of customer service chats processed by AI agents, with nearly half resolved without live agent interaction.
Negative Updates
Underperformance of State Farm Partnership
Generated slightly more than 30,000 subscribers, below the projected level for the State Farm partnership.
Challenges in Dealer Channel
The dealer channel was down year-over-year, although replaced by bulk acquisitions.
Fluctuations in Nonpayment and Voluntary Cancellations
Nonpayment cancellations were modestly higher than last year, and voluntary cancellations also saw an increase.
Tariff Exposure
Potential tariffs could impact financials, although the company believes it can manage within full-year guidance ranges.
Company Guidance
During the ADT Second Quarter 2025 earnings call, the company reported strong financial results, highlighting several key metrics. ADT achieved a record recurring monthly revenue of $363 million, a 2% year-over-year increase, and total revenue grew by 7% to $1.3 billion. The company also posted an adjusted earnings per diluted share of $0.23, representing a 35% increase. Adjusted free cash flow, including interest rate swaps, reached $500 million in the first half, up 38%, enabling ADT to return $589 million to shareholders through share repurchases and dividends. Customer attrition improved slightly to 12.8%, down 0.1 percentage point from the previous year. Additionally, ADT completed a strategic acquisition of approximately 50,000 subscribers for $89 million. The company reaffirmed its full-year guidance, with expectations for total revenue, adjusted EBITDA, and adjusted free cash flow, while raising its adjusted earnings per share guidance by $0.04 to $0.81-$0.89 per share.

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
75
Positive
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
65
Positive
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
70
Positive
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue4.90B4.65B4.38B4.20B5.32B
Gross Profit4.05B3.90B3.68B3.76B3.80B
EBITDA2.60B2.56B2.36B1.96B1.94B
Net Income501.05M463.01M132.66M-341.00M-632.00M
Balance Sheet
Total Assets16.05B15.96B17.87B16.89B16.12B
Cash, Cash Equivalents and Short-Term Investments96.21M14.62M257.00M24.00M205.00M
Total Debt7.71B7.94B9.91B9.69B9.64B
Total Liabilities12.25B12.18B14.44B13.64B13.08B
Stockholders Equity3.80B3.79B3.43B3.25B3.04B
Cash Flow
Free Cash Flow1.72B850.84M976.00M787.00M792.00M
Operating Cash Flow1.88B1.66B1.89B1.65B1.37B
Investing Cash Flow-1.30B242.49M-1.53B-1.70B-1.14B
Financing Cash Flow-515.36M-2.14B-15.00M-128.00M-70.00M

Adt Technical Analysis

Technical Analysis Sentiment
Positive
Last Price8.44
Price Trends
50DMA
8.36
Positive
100DMA
8.12
Positive
200DMA
7.67
Positive
Market Momentum
MACD
0.05
Positive
RSI
50.80
Neutral
STOCH
49.69
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 8.44 is below the 20-day moving average (MA) of 8.46, above the 50-day MA of 8.36, and above the 200-day MA of 7.67, indicating a neutral trend. The MACD of 0.05 indicates Positive momentum. The RSI at 50.80 is Neutral, neither overbought nor oversold. The STOCH value of 49.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ADT.

Adt Risk Analysis

Adt disclosed 57 risk factors in its most recent earnings report. Adt reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Adt Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$1.06B24.1827.48%1.69%-1.05%-2.78%
77
Outperform
$14.08B22.7438.99%1.20%5.49%14.46%
76
Outperform
$7.25B12.6317.13%2.61%3.80%-3.18%
76
Outperform
$3.61B61.802.58%14.02%-69.91%
73
Outperform
$1.70B-21.34%0.27%-18.75%
72
Outperform
$3.92B25.3154.50%1.07%1.97%41.88%
65
Neutral
$11.05B15.765.13%1.92%3.11%-24.90%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ADT
Adt
8.44
0.92
12.23%
BCO
Brink's Company
91.77
-18.20
-16.55%
NSSC
Napco Security Technologies
30.42
-23.20
-43.27%
ALLE
Allegion
165.39
29.73
21.92%
ARLO
Arlo Technologies
16.23
0.91
5.94%
REZI
Resideo Technologies
24.43
2.04
9.11%

Adt Corporate Events

Private Placements and FinancingStock Buyback
ADT Enters Credit Agreement Amendment for $550M Loan
Neutral
Jul 25, 2025

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.

The most recent analyst rating on (ADT) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Adt stock, see the ADT Stock Forecast page.

Stock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
ADT Reports Strong Q2 2025 Financial Results
Positive
Jul 24, 2025

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.

The most recent analyst rating on (ADT) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Adt stock, see the ADT Stock Forecast page.

Executive/Board Changes
Marques Coleman Retires from ADT Board of Directors
Neutral
Jun 2, 2025

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.

The most recent analyst rating on (ADT) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Adt stock, see the ADT Stock Forecast page.

Executive/Board ChangesShareholder Meetings
ADT Inc. Holds Annual Stockholders Meeting
Neutral
May 21, 2025

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.

The most recent analyst rating on (ADT) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Adt stock, see the ADT Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 25, 2025