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Adt
(NYSE:ADT)
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Rating:75Outperform
Price Target:
$8.50
▲(20.74% Upside)
Action:Reiterated
Date:07/30/26
ADT scores well primarily on improving profitability and especially strong cash generation, supported by attractive valuation (low P/E and a ~3% dividend). The earnings outlook reinforces cash flow strength and capital returns, but the overall score is capped by a still-leveraged balance sheet and only modest/flat near-term growth signals, while technicals suggest improving—but not decisive—momentum.
Positive Factors
Strong free cash flow generation
Consistent, high operating cash flow and materially expanded free cash flow give ADT durable internal financing to service debt, fund product investments (ADT Plus/Origin AI), sustain dividends and repurchases, and withstand cyclical pressure without immediate reliance on external capital.
Negative Factors
Elevated leverage and debt levels
Material outstanding debt increases sensitivity to refinancing risk and limits strategic flexibility. Even with multi-year maturities and lower cost of debt, elevated leverage constrains M&A optionality, raises interest exposure in stress scenarios, and demands sustained cash generation to keep solvency risk low.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow generation
Consistent, high operating cash flow and materially expanded free cash flow give ADT durable internal financing to service debt, fund product investments (ADT Plus/Origin AI), sustain dividends and repurchases, and withstand cyclical pressure without immediate reliance on external capital.
Read all positive factors
Adt (ADT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.58B
Dividend Yield2.88%
Average Volume (3M)8.12M
Price to Earnings (P/E)9.9
Beta (1Y)0.76
Revenue Growth2.10%
EPS Growth6.68%
CountryUS
Employees12,200
SectorIndustrials
Sector Strength72
IndustrySecurity & Protection Services
Share Statistics
EPS (TTM)0.77
Shares Outstanding675,814,700
10 Day Avg. Volume6,768,654
30 Day Avg. Volume8,116,946
Financial Highlights & Ratios
PEG Ratio0.39
Price to Book (P/B)1.78
Price to Sales (P/S)1.31
P/FCF Ratio5.12
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$8.14Price Target Upside15.59% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)0.91
Revenue Forecast (FY)$5.15B
Adt Business Overview & Revenue Model
Company Description
Headquartered in Boca Raton, Florida, ADT Inc. has been a leading provider of security, automation, and smart home solutions for consumers and businesses throughout the United States since its founding in 1874. The company delivers a broad spectru...
How the Company Makes Money
ADT primarily makes money through recurring monthly fees for professional monitoring and related subscription services. Customers typically sign up for monitoring plans that include 24/7 alarm monitoring, emergency dispatch coordination, and acces...
Adt Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call emphasized strong cash generation, disciplined capital allocation (notably large share repurchases), and significant strategic investments in ADT Plus, Origin AI and AI-driven service efficiency — all positive indicators for future margin expansion and product differentiation. Near-term trade-offs include intentional tightening of acquisition channels and credit policies that weighed on gross adds, a modest top-line growth outlook (revenues and RMR roughly flat), increased allowance for credit losses, and Q2 cash flow seasonality tied to SAC and advertising for the ADT Blue launch. Overall, the positives around cash flow, balance sheet strength, product roadmap and operational efficiency materially outweigh the contained, largely intentional near-term headwinds.Positive Updates
Strong Free Cash Flow Generation
Adjusted free cash flow (including swaps) of $414M in Q1, up $187M or >80% year-over-year, driven by lower cash interest, working capital timing and profitability; company reiterates ~20% adjusted free cash flow growth for full-year 2026.
Negative Updates
Top-Line Growth Remains Limited
Monitoring and services revenue and total RMR were essentially flat year-over-year ($359M RMR); full-year revenue and adjusted EPS guidance is approximately flat to last year, indicating constrained near-term top-line growth.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Free Cash Flow Generation
Adjusted free cash flow (including swaps) of $414M in Q1, up $187M or >80% year-over-year, driven by lower cash interest, working capital timing and profitability; company reiterates ~20% adjusted free cash flow growth for full-year 2026.
Read all positive updates
Company Guidance
ADT reiterated 2026 guidance calling for approximately 20% adjusted free cash flow growth year‑over‑year while expecting revenue and adjusted EPS to be roughly flat to last year (and a longer‑range FCF target of 10%+); management said Q2 revenue and EPS should be slightly lower sequentially due to higher advertising for the ADT Blue launch and other investments, and adjusted free cash flow is expected to be $100–$150 million lower sequentially because of seasonal SAC, working capital timing and tax payments. That guidance builds off a strong Q1 baseline: $414M of adjusted free cash flow including swaps, $0.23 adjusted EPS (+10% YoY), $674M adjusted EBITDA (+2%), $1.3B total revenue (+1%), $359M ending RMR (flat YoY), 13.1% gross revenue attrition, a 2.3‑year revenue payback period, 161k gross adds (adding $10.1M RMR), and $198M of installation revenue (+7%); it also factors capital priorities and balance sheet metrics (board‑authorized $1.5B repurchase program, ~35M shares repurchased YTD for ~$230M, net debt $7.3B at 2.7x adjusted EBITDA, ~$119M cash, $800M revolver, ~5‑year weighted average debt maturity, ~4.3% cost of debt) as well as planned investments (ADT Plus/Origin AI, e‑commerce) and expected tariffs.Adt Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
56
Neutral
Cash Flow
84
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.16B | 5.13B | 4.90B | 4.65B | 5.17B | 5.31B |
| Gross Profit | 2.65B | 2.53B | 2.48B | 2.38B | 2.20B | 1.72B |
| EBITDA | 2.77B | 2.86B | 2.80B | 2.69B | 2.52B | 2.25B |
| Net Income | 619.13M | 595.95M | 501.05M | -166.97M | 132.66M | -340.82M |
Balance Sheet | ||||||
| Total Assets | 15.74B | 15.82B | 16.05B | 15.96B | 17.87B | 16.89B |
| Cash, Cash Equivalents and Short-Term Investments | 4.00M | 81.00M | 204.06M | 14.62M | 257.00M | 24.00M |
| Total Debt | 7.69B | 7.69B | 7.81B | 7.84B | 9.83B | 9.69B |
| Total Liabilities | 12.26B | 12.04B | 12.25B | 12.18B | 14.44B | 13.64B |
| Stockholders Equity | 3.48B | 3.78B | 3.80B | 3.79B | 3.43B | 3.25B |
Cash Flow | ||||||
| Free Cash Flow | 2.47B | 1.31B | 1.20B | 850.84M | 976.00M | 787.00M |
| Operating Cash Flow | 2.80B | 1.89B | 1.88B | 1.66B | 1.89B | 1.65B |
| Investing Cash Flow | -1.57B | -1.12B | -1.30B | 242.49M | -1.53B | -1.70B |
| Financing Cash Flow | -1.31B | -862.00M | -515.36M | -2.14B | -15.00M | -128.45M |
Adt Technical Analysis
Positive
7.04
Price Trends
6.84
Positive
6.82
Positive
7.35
Positive
Market Momentum
0.26
Negative
75.74
Negative
92.40
Negative
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 7.04 is below the 20-day moving average (MA) of 7.09, above the 50-day MA of 6.84, and below the 200-day MA of 7.35, indicating a bullish trend. The MACD of 0.26 indicates Negative momentum. The RSI at 75.74 is Negative, neither overbought nor oversold. The STOCH value of 92.40 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ADT.
Adt Risk Analysis
Adt disclosed 54 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $13.38B | 20.55 | 31.99% | 1.38% | 10.63% | 5.92% | |
75 Outperform | $5.58B | 9.92 | 16.83% | 3.13% | 2.10% | 6.68% | |
71 Outperform | $1.60B | 51.08 | 22.92% | ― | 10.85% | ― | |
70 Outperform | $1.32B | 36.00 | 20.86% | 1.62% | 8.83% | -16.34% | |
68 Neutral | $4.88B | 27.42 | 67.82% | 0.84% | 7.31% | 14.99% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
48 Neutral | $5.19B | -9.58 | -17.64% | ― | 8.08% | -1039.66% |
* Industrials Sector Average
ADT
Adt
7.70
-0.63
-7.53%
BCO
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115.79
16.65
16.80%
NSSC
Napco Security Technologies
40.34
11.17
38.29%
ALLE
Allegion
168.58
6.37
3.93%
ARLO
Arlo Technologies
15.93
-0.17
-1.06%
REZI
Resideo Technologies
26.24
6.39
32.18%
Adt Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
ADT boosts cash flow, declares quarterly shareholder dividend
Positive
Jul 30, 2026
On July 30, 2026, ADT reported second-quarter 2026 results showing a 2% rise in total revenue to $1.3 billion, solid recurring metrics and strong cash generation, with operating cash flow up 18% and adjusted free cash flow up 48% year over year. G...
Executive/Board ChangesPrivate Placements and FinancingShareholder Meetings
ADT Expands Term Loan Facility and Confirms Board Decisions
Neutral
May 28, 2026
On May 27, 2026, ADT’s subsidiaries amended their term loan credit agreement and incurred an additional $100 million of incremental first lien senior secured term A loans, bringing total outstanding term A loans to about $423 million, with p...
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
ADT Ends Apollo Governance Rights with Bylaw Changes
Neutral
May 8, 2026
On May 5, 2026, ADT Inc. announced that Class III directors Reed B. Rayman and Nicole Bonsignore, whose terms were set to expire at the 2026 annual meeting, and Class I director Benjamin Honig, whose term was to run through the 2027 annual meeting...
Business Operations and StrategyStock BuybackDelistings and Listing ChangesDividendsFinancial DisclosuresM&A Transactions
ADT Reports Solid Q1 2026 Results, Boosts Shareholder Returns
Positive
Apr 30, 2026
On April 30, 2026, ADT reported first-quarter 2026 results showing total revenue up 1% year over year to $1.3 billion and recurring monthly revenue of $359 million, with GAAP income from continuing operations rising 19% to $169 million, or $0.20 p...
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.