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Adt
(NYSE:ADT)
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Rating:72Outperform
Price Target:
$8.00
▲(13.64% Upside)
Action:Reiterated
Date:08/18/26
ADT’s score is driven primarily by strong financial performance—especially robust free cash flow—and an attractive valuation (low P/E with a dividend). The latest earnings call supports the outlook with a modest guidance raise and continued capital returns, though timing-related cash benefits and expected 2027 tax/interest headwinds add risk. Technical indicators are mixed, limiting near-term momentum confidence.
Positive Factors
Strong cash generation and conversion
ADT’s substantial operating and free cash flow supports debt service, reinvestment and shareholder returns. Strong cash conversion gives the subscription business financial resilience, although consistency through a downturn remains important.
Negative Factors
Elevated leverage limits financial flexibility
ADT remains materially leveraged for a defensive-services company, increasing sensitivity to refinancing costs and earnings volatility. High debt can constrain investment and capital allocation if operating conditions weaken.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation and conversion
ADT’s substantial operating and free cash flow supports debt service, reinvestment and shareholder returns. Strong cash conversion gives the subscription business financial resilience, although consistency through a downturn remains important.
Read all positive factors
Adt (ADT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.43B
Dividend Yield2.96%
Average Volume (3M)8.12M
Price to Earnings (P/E)9.7
Beta (1Y)0.70
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
$7.92Price Target Upside12.45% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)0.92
Revenue Forecast (FY)$5.22B
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:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call presented a largely positive picture driven by very strong free cash flow generation, disciplined capital allocation (notably large share repurchases), product innovation (ADT Plus, ADT Blue, presence sensing) and measurable AI-driven service efficiencies. These positives were balanced by softer gross additions (largely due to fewer bulk purchases and dealer/affiliate softness), a slight decline in monitoring revenue, and the caution that some cash benefits were timing-related and that higher cash taxes and interest are expected in 2027. Management raised 2026 guidance modestly and reiterated focus on margin and retention improvements as dealer migration and AI initiatives scale.Positive Updates
Very Strong Free Cash Flow Generation
Adjusted free cash flow (including interest rate swaps) was $406M in Q2, up $133M or 48% year-over-year. Year-to-date adjusted free cash flow was $820M, up more than $300M or ~64% versus prior year, driven by working capital timing, lower cash taxes and interest, and reduced subscriber acquisition spend.
Negative Updates
Weak Gross Additions and Bulk Purchase Variability
Gross RMR additions fell 17% year-over-year and gross unit additions declined 22%. A key driver was far fewer bulk account purchases (10k units this quarter vs 50k units in Q2 last year). Dealer channel softness and deliberate dialing back of expensive affiliate channels also reduced gross adds.
Read all updates
Q2-2026 Updates
Positive
Negative
Very Strong Free Cash Flow Generation
Adjusted free cash flow (including interest rate swaps) was $406M in Q2, up $133M or 48% year-over-year. Year-to-date adjusted free cash flow was $820M, up more than $300M or ~64% versus prior year, driven by working capital timing, lower cash taxes and interest, and reduced subscriber acquisition spend.
Read all positive updates
Company Guidance
ADT said it is modestly raising its full‑year 2026 outlook and now expects total revenue to grow ~2%, adjusted EPS to grow ~2%, and adjusted free cash flow to rise ~30% (driven by tax planning and working‑capital management); Q2 adjusted FCF was $406M (up 48% YoY) and YTD FCF $820M (up 64% YoY). In Q2 the company reported revenue of $1.3B (up 2%), installation revenue $230M (up 17%), adjusted EBITDA $671M, adjusted income $180M ($0.23/diluted share), ending RMR $360M, 190k gross adds generating $11.9M RMR, net cash SAC $345M (down 7%), trailing‑12‑month attrition ~13% (13.1%) and revenue payback ~2.3 years. Management expects Q4 income to be somewhat higher than Q3 with Q3/Q4 revenue and cash broadly similar, warned of higher cash taxes and cash interest in 2027 (citing ~$50–$100M potential headwinds from swaps/refinancing), and reiterated a strong balance sheet: net debt ≈$7.4B, leverage 2.8x adjusted EBITDA (weighted average cost ~4.3%), $800M undrawn revolver, and ~$885M remaining under a $1.5B repurchase authorization.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 | 1.88B | 1.31B | 1.20B | 850.84M | 976.00M | 787.00M |
| Operating Cash Flow | 2.16B | 1.89B | 1.88B | 1.66B | 1.89B | 1.65B |
| Investing Cash Flow | -1.16B | -1.12B | -1.30B | 242.49M | -1.53B | -1.70B |
| Financing Cash Flow | -1.12B | -862.00M | -515.36M | -2.14B | -15.00M | -128.45M |
Adt Technical Analysis
Positive
7.04
Price Trends
7.07
Positive
6.97
Positive
7.28
Positive
Market Momentum
0.07
Positive
55.24
Neutral
71.43
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 7.04 is below the 20-day moving average (MA) of 7.50, below the 50-day MA of 7.07, and below the 200-day MA of 7.28, indicating a neutral trend. The MACD of 0.07 indicates Positive momentum. The RSI at 55.24 is Neutral, neither overbought nor oversold. The STOCH value of 71.43 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 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $1.43B | 45.32 | 21.25% | ― | 15.65% | ― | |
76 Outperform | $1.30B | 29.53 | 23.59% | 1.62% | 11.39% | 0.75% | |
76 Outperform | $13.64B | 20.92 | 31.99% | 1.38% | 10.63% | 5.92% | |
72 Outperform | $5.43B | 9.66 | 16.83% | 3.13% | 2.10% | 6.68% | |
68 Neutral | $4.57B | 25.58 | 64.68% | 0.84% | 8.12% | 16.12% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
54 Neutral | $3.03B | 8.21 | 14.70% | ― | 3.42% | ― |
* Industrials Sector Average
ADT
Adt
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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...
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.