ADT Inc. (ADT) | Investment Case

1. Company Snapshot

1.a. 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.

Show Full description

1.b. Last Insights on ADT

ADT Inc.'s recent performance faced challenges due to customer churn and static subscriber numbers. Despite strong Q3 earnings and revenue growth of 4% driven by recurring monthly revenue, concerns linger. The company's partnerships with Google and State Farm, as well as investments in AI and smart home solutions, aim to improve retention. A $1.0 billion notes offering and aggressive share buybacks, having returned $746 million to shareholders year-to-date, support shareholder value. Industry trends favor security and safety stocks, including ADT, amid rising safety awareness.

1.c. Company Highlights

Last Price	8.0
Change Percentage	-0.44%
Open	8.03
Previous Close	8.03
Market Cap ( Millions)	6116
Volume	3853530
Year High	8.94
Year Low	6.71
M A 50	8.4
M A 200	8.31

FCF Yield	27.69%
Dividend Yield	2.75%
ROE	17.38%
Debt / Equity	213.34%
Net Debt / EBIDTA	335.13%
Price To Book	1.71
Price Earnings Ratio	9.78
Price To FCF	3.61
Price To sales	1.2
EV / EBITDA	6.0

2. ADT's Q3 2025 Earnings: A Strong Performance

ADT delivered a solid third quarter in 2025, with total revenue growing 4% to $1.3 billion, adjusted EBITDA increasing 3% to $676 million, and adjusted earnings per share rising 15% year-over-year to $0.23, beating analyst estimates of $0.22. The company's cash flow continues to be a highlight, with adjusted free cash flow, including interest rate swaps, reaching $709 million year-to-date, up 36%. The recurring monthly revenue balance stood at $362 million, up 1% year-over-year.

Publication Date: Nov -06

                                    📋 Highlights
                                    Revenue Growth::
                                                Total revenue increased 4% to $1.3 billion in Q3 2025, driven by strong demand for ADT+ and expanded smart home offerings.
Cash Flow Momentum::
                                                Adjusted free cash flow reached $208 million in Q3 (up 32% YoY) and $709 million year-to-date (up 36% YoY), reflecting operational efficiency.
AI Adoption Impact::
                                                100% of chat interactions are AI-contained with 50% accuracy, and voice call containment at 20%, reducing manual testing and operational costs.
Debt Repayment::
                                                Fully repaid $1.3 billion in 2025 Second Lien Notes and secured a new $325 million term loan to refinance higher-cost debt.

                                

Operational Highlights

ADT remains focused on driving operational efficiency, investing in innovation, and generating long-term value for stakeholders. The company continues to expand its suite of offerings, with an increasing percentage of new customers opting for ADT+, leading to increased installation revenue and potentially stronger retention over time. The rollout of AI agents for voice calls is showing promising results, with AI-driven cost savings beginning to materialize, particularly in call center operations.

Guidance and Outlook

With two months to go, ADT remains on track to deliver results consistent with its guidance, having tightened and adjusted its guidance ranges. The company now expects total revenue between $5.075 billion and $5.175 billion, with the midpoint consistent with its original guidance. The adjusted EPS midpoint has been slightly increased, offset by a decrease in the adjusted EBITDA midpoint.

Valuation and Capital Allocation

ADT's current valuation metrics indicate a relatively attractive profile, with a P/E Ratio of 9.93, P/S Ratio of 1.22, and EV/EBITDA of 6.04. The company has demonstrated a commitment to returning value to shareholders, having fully consumed its $500 million share repurchase authorization. With a significant flexibility for debt repayment, share repurchases, M&A, or other priorities, ADT is well-positioned to navigate the current market environment. Analysts estimate revenue growth at 3.7% for next year, suggesting a stable outlook for the company.

3. NewsRoom

Head to Head Analysis: Cycurion (NASDAQ:CYCU) & ADT (NYSE:ADT)

Dec -04

Source: defenseworld.net

Is ADT (ADT) Outperforming Other Industrial Products Stocks This Year?

Nov -24

Source: zacks.com

ADT Inc. $ADT Shares Purchased by Envestnet Asset Management Inc.

Nov -17

Source: defenseworld.net

Bailard Inc. Increases Stock Position in ADT Inc. $ADT

Nov -15

Source: defenseworld.net

Are Industrial Products Stocks Lagging ADT (ADT) This Year?

Nov -07

Source: zacks.com

4 Security & Safety Stocks to Consider on Promising Industry Trends

Nov -06

Source: zacks.com

ADT Inc. (ADT) Q3 2025 Earnings Call Transcript

Nov -04

Source: seekingalpha.com

ADT (ADT) Tops Q3 Earnings and Revenue Estimates

Nov -04

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.60%)

6. Segments

Consumer and Small Business

Expected Growth: 3.5%

ADT Inc.'s Consumer and Small Business segment growth of 3.5% is driven by increasing adoption of smart home security systems, rising demand for DIY security solutions, and growing need for cybersecurity services among small businesses. Additionally, strategic partnerships and acquisitions, such as the purchase of Sunpro Solar, have expanded ADT's offerings and reach, contributing to the segment's growth.

Solar

Expected Growth: 5.0%

The 5.0% growth of Solar from ADT Inc. is driven by increasing adoption of renewable energy, declining solar panel costs, and government incentives. Additionally, ADT's strong brand recognition and expanding customer base contribute to the growth. Furthermore, the rising demand for energy independence and environmental concerns also fuel the segment's growth.

7. Detailed Products

Home Security Systems

ADT's home security systems provide 24/7 monitoring and protection against burglary, fire, and environmental hazards.

Smart Home Automation

ADT's smart home automation solutions integrate with security systems to control lighting, temperature, and door locks remotely.

Video Surveillance

ADT's video surveillance solutions provide real-time video monitoring and recording to deter crime and protect properties.

Fire and Life Safety

ADT's fire and life safety solutions provide early detection and warning systems for fire, carbon monoxide, and other hazards.

Medical Alert Systems

ADT's medical alert systems provide emergency response and monitoring for seniors and individuals with medical conditions.

Commercial Security

ADT's commercial security solutions provide customized security systems for businesses of all sizes.

8. ADT Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

ADT Inc. faces moderate threat from substitutes due to the presence of alternative security solutions such as DIY security systems and other security providers.

Bargaining Power Of Customers

ADT Inc. has a large customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

ADT Inc. has a diversified supplier base, which reduces the bargaining power of individual suppliers, giving the company an upper hand in negotiations.

Threat Of New Entrants

The security services industry is highly competitive, and new entrants can easily enter the market, posing a significant threat to ADT Inc.'s market share.

Intensity Of Rivalry

The security services industry is highly competitive, with many established players, leading to a high intensity of rivalry among competitors, including ADT Inc.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	67.33%
Debt Cost	6.68%
Equity Weight	32.67%
Equity Cost	11.76%
WACC	8.34%
Leverage	206.06%

11. Quality Control: ADT Inc. passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

ADT

A-Score: 6.9/10

Value: 7.4

Growth: 6.6

Quality: 6.4

Yield: 5.0

Momentum: 8.0

Volatility: 8.0

1-Year Total Return ->

Mueller Industries

A-Score: 6.3/10

Value: 4.5

Growth: 7.1

Quality: 7.9

Yield: 2.0

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

Brady

A-Score: 5.9/10

Value: 3.8

Growth: 6.2

Quality: 7.6

Yield: 3.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

MSA Safety

A-Score: 5.3/10

Value: 2.6

Growth: 6.7

Quality: 6.6

Yield: 2.0

Momentum: 5.0

Volatility: 9.0

1-Year Total Return ->

Brinks

A-Score: 5.1/10

Value: 4.4

Growth: 6.7

Quality: 4.0

Yield: 2.0

Momentum: 6.0

Volatility: 7.7

1-Year Total Return ->

Resideo Technologies

A-Score: 5.1/10

Value: 7.3

Growth: 5.6

Quality: 3.7

Yield: 0.0

Momentum: 9.5

Volatility: 4.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-7.88%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.34%

ADT Inc. - US00090Q1031

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ADT

1.c. Company Highlights

Higher Yield

Fairly Valued

Average Quality

Stable Momentum

Earnings Beats

Revenues Beats

Medium Volatility

Average Growth

Less Volatile

2. ADT's Q3 2025 Earnings: A Strong Performance

Operational Highlights

Guidance and Outlook

Valuation and Capital Allocation

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.60%)

6. Segments

Consumer and Small Business

Expected Growth: 3.5%

Solar

Expected Growth: 5.0%

7. Detailed Products

Home Security Systems

Smart Home Automation

Video Surveillance

Fire and Life Safety

Medical Alert Systems

Commercial Security

8. ADT Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: ADT Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

7.99$

Current Price

8.0$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA