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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Adt Inc. (XNYS:ADT) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ADT
Name:
ADT INC. (XNYS:ADT)
Sector:
87.61M
Industry:
Security & Protection Services
CEO:
Mr. James DeVries
Total Employees:
25,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -2594.21% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ADT INC.(ADT) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SECURITY & PROTECTION SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
7.21
One Month Price Target:
$7.29
Six Month Price Target :
$7.69
Likely Price in One Year's Time:
Ticker:
$8.17
Likely Trading Range Today Under (Normal Volatility)
$7.16
Price Upper limit ($) :
$7.26
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$6.64
This week:
$5.93
This month :
$4.65
Other Primary facts
Market Cap:
7.66B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
911.48M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
56.56%
-19.73%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$9.87
$8.65
$4.55
$5.77
Medium risk (<10%) entry points
Buy Call
Sell Call
$8.26
Buy Put:
Sell Put:
$8.00
$6.16
$6.42
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ADT
Sharpe Ratio:
0.66%
Comparison:
ADT, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -62.31% lower than the industry
& is -71.09% lower than the market/S&P 500 average
Average Returns/Yield of
ADT
Daily returns:
0.03%
Weekly returns:
0.17%
Monthly returns:
0.69%
Yearly returns:
15.65%
Comparison of returns:
Average annual returns/yield (last 3 years) is -47.19% below industry average
Classification:
ADT, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.99
Statistical test of Returns:
ADT has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.88%
Weekly Volatility:
8.68%
Monthly Volatility:
17.36%
Yearly Volatility:
60.15%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.46%
Volatility in last five trading days has been -88.25% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.94%
Weekly VaR:
-17.75%
Monthly VaR:
-35.51%
How Much Can the price of
ADT
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-31%
Worst case (decline):
>85%
This translates to price declining to:
$4.97
This translates to price declining to:
$1.08
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
ADT is a 150.60% riskier investment compared to the market/S&P 500 & is 114.69% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 23.67% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ADT
Beta in relation to market/S&P 500--1.98
Expected beta in 1 year's time:
1.15
Expected beta in 3 year's time:
1.627
Unlevered (debt free) Beta:
0.522
Beta in relation to Nasdaq (XNAS):
0.893
Beta in relation to all global stocks::
0.686
Beta Comparison & Analysis
Beta of competitors/peers::
1.289
Beta is 53.49% higher than peers
Average Industry Beta:
1.346
Beta is 46.99% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.084
Alpha is -357.27% below industry average alpha yield
Alpha is -537% below the market average
Analysis of Cost of Capital of
ADT
Equity cost of capital:
0.167
Equity cost of capital is 35.02% above industry mean WACC
Unlevered (without debt) cost of capital:
4.40%
Before-tax cost of debt:
1.98%
After-tax cost of debt:
1.56%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.56%
WACC is -1.54% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$6.09
Revenue growth rate per share of (3Y):
2
Annual revenue growth rate is -83.88% below industry average
EPS:
-$0.30
Expected Annual growth rate of EPS (3Y):
-10.40%
Expected future EPS growth rate is -9.36% lower than the Security & Protection Services industry
Free cash flow (FCF) per share:
$0.81
Balance sheet equity growth per share: 43.72%
Equity growth rate per share is 186.77% higher than the industry
Debt per share
$10.68
EBITDA per share
$2.04
Valuation Analysis Today of
ADT
P/E Ratio:
0
P/E Ratio of Competitors/Peers:
20.73
P/E ratio is -100.00% lower than main peers & is higher than the industry
-
ADT is -119.24% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $5.62
Present value of the expected future dividends only: $0.84
P/S (Price to Sales ratio):
1.18
Price to sales ratio is -90.24% below the industry mean
P/B (Price to book value ratio):
2
Price to free cash flow: 8.88
-
Net income growth rate (3Y):
-44.90%
Net income growth rate is 143.00% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: -13.09%
Dividend yeild: 1.94%
Previous Dividend: $0.04
Previous adjusted dividend: $0.04
Previous Dividend: $0.14
-
-
Average dividend payment (long-term): $0.04
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 10/03/2022
Expected next dividend record date: 14/09/2022
-
Previous dividend payment date: 07/05/2022
Previous dividend record date: 16/06/2022
-
Dividend History:
2022-06-15--$0.04
2021-12-15--$0.04
2021-06-16--$0.04
2022-03-16--$0.04
2021-09-15--$0.04
2021-03-17--$0.04
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
296.78%
Net debt to equity ratio:
301.28%
Debt to assets ratio:
57.22%
Net debt to assets ratio:
58.08%
Debt-to-asset ratio is 2.69% above industry average
Ability to repay debt:
Interest coverage ratio:
9.46
Interest coverage ratio is -80.03% less than industry average
Looking forward:
Debt growth rate:
2.11%
Annual debt growth is -95% lower than industry average debt growth rate
Debt repayment rate in last quarter: 1.76%
Analysis of Key Statistics
Correlation of price movement with the market:
0.44
Statistical significance of correlation:
ADT has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.527
Stock price is -16.49% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.527
Correlation of price movement with Nasdaq (^IXIC):
-0.002
Covariance of price movement with the market:
-0.005
Kurtosis
67.075
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
4.344
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
ADT
Gross Profit Margin Ratio:
279%
Operating Profit Margin Ratio:
1.94%
Operating profit margin is -91.12% lower than the industry
Net Profit Margin Ratio:
279%
Effective Tax Rate:
5.93%
Effective tax rate is -72.37% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-7.36%
Return on equity (ROE) is -215.28% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-1.42%
Return on assets (ROA) is -136.94% lower than the industry
Financial Leverage:
2.3x
Current Ratio:
0.68
Current ratio is -87.99% below industry average
Cash Conversion Cycle (days):
-65.4
Cash conversion cycle is -121.10% below industry average
The remaining useful life of property plant & equipment is: 4.6 years
Stock based compensation to net income ratio:
-6.64%
In-depth Efficiency Analysis
Revenue generated per employee:
221.9K
Each employee generates -20% less revenue than industry average revenue per employee
EBITDA generated per employee:
74.2K
Each employee generates -7% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 9.7K
Each employee generates -170% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
3.5K
Each employee generates -43% less free cash flow than industry average revenue per employee
Assets/Capital per employee
637.9K
Each employee generates -43% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
ADT
KBR, INC. (XNYS:KBR)
RITCHIE BROS. AUCTIONEERS INCORPORATED (XNYS:RBA)
WESCO INTERNATIONAL, INC. (XNYS:WCC)
IAA, INC. (XNYS:IAA)
THE AZEK COMPANY INC. (XNYS:AZEK)
EMCOR GROUP, INC. (XNYS:EME)
ZIM INTEGRATED SHIPPING SERVICES LTD (XNYS:ZIM)
Southeast Airport Group (XNYS:ASR)
WATTS WATER TECHNOLOGIES, INC. (XNYS:WTS)
Current Analyst Ratings
Strong buy�8%
Buy�13%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
5.55B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
1.68B
3.87B
-
-
1.82B
-
1.43B
3.25B
-
196.11M
1.92B
1.86B
107.64M
- 241334.00K
- 337327.00K
- 19993.00K
- 241334.00K
Statement of Cash Flow
Date:
Period:
476.12M
Differed Income Tax :
16.17M
Stock Based Compensation :
16.02M
Change in Working Capital :
- 174874.00K
Accounts Receivables:
-
Other Working Capital:
- 174874.00K
Other Non-Cash Items:
- 77014.00K
Net Cash Provided by Operating Activities:
308.07M
Investments in PP&E:
- 38317.00K
Net Acquisitions:
32.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
17.40M
-
17.40M
453.82M
380.77M
215.41M
1.07B
3.28B
5.94B
5.29B
-
-
1.44B
15.95B
-
17.01B
449.54M
164.83M
-
373.86M
590.75M
1.58B
9.74B
224.05M
12.16B
-
13.73B
9.06M
- 3933140.00K
- 57890.0K
7.26B
March 31, 2022 at 6:00:00 AM
4.93B
3.28B
17.01B
-
9.90B
9.9B
-
- 366838.00K
- 405123.00K
- 174145.00K
-
-
- 31596.00K
297.59M
91.85M
-
- 5206.00K
28.07M
33.28M
308.07M
- 220458.00K
87.61M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
ADT
2023
2024
2025
2026
2027
$5.76
$6.52
$7.39
$8.37
$9.48