📊 ADT Key Takeaways
Is ADT Inc. (ADT) a Good Investment?
ADT demonstrates solid operational performance with strong free cash flow generation (33.3% FCF margin) and improving net income growth (+18.9% YoY). However, significant leverage (2.06x Debt/Equity, 2.8x interest coverage) and concerning liquidity metrics (0.93x current ratio) create financial stress that offsets operational strength, warranting a cautious stance.
ADT shows solid underlying fundamentals with steady revenue growth, expanding net income, strong operating profitability, and exceptional free cash flow generation. The business appears operationally resilient, but high leverage, weak liquidity, and only moderate interest coverage limit financial flexibility and keep the overall outlook balanced rather than clearly bullish.
Why Buy ADT Inc. Stock? ADT Key Strengths
- Strong free cash flow generation of $1.7B with 33.3% FCF margin, indicating efficient cash conversion
- Improving profitability with net income growth of +18.9% YoY despite modest revenue growth of +4.7%
- Solid operating margin of 25.5% demonstrates operational leverage in the security services sector
- Substantial operating cash flow of $1.9B provides cushion for debt service and capital needs
- Strong free cash flow generation with $1.71B of FCF and a 33.3% FCF margin
- Healthy operating profitability, including a 25.5% operating margin and 11.6% net margin
- Positive growth profile with revenue up 4.7% YoY and net income up 18.9% YoY
ADT Stock Risks: ADT Inc. Investment Risks
- High financial leverage with 2.06x Debt/Equity ratio and $7.8B long-term debt representing 49% of total assets
- Weak liquidity position with current ratio of 0.93x and minimal cash reserves of $80.8M relative to debt obligations
- Modest interest coverage ratio of 2.8x leaves limited margin for operational downturns or rate increases
- Negative diluted EPS of -$0.57 indicates substantial debt service and non-operational charges despite strong net income
- Capital intensity with $175.7M capex requirements ongoing in security services business
- High leverage, with $7.80B in long-term debt and debt-to-equity of 2.06x
- Tight liquidity, as shown by current and quick ratios of 0.93x
- Interest coverage of 2.8x leaves limited cushion if borrowing costs stay elevated or earnings weaken
Key Metrics to Watch
- Debt-to-EBITDA ratio and trajectory of long-term debt reduction from FCF
- Interest coverage trend and refinancing capability as debt matures
- Operating cash flow sustainability and conversion to free cash flow
- Current ratio improvement and working capital management
- Revenue growth acceleration and operating margin sustainability
- Interest coverage and total debt reduction progress
- Revenue growth durability alongside free cash flow conversion
ADT Inc. (ADT) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 33.3% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. The current ratio below 1.0x warrants monitoring of short-term liquidity.
ADT Profit Margin, ROE & Profitability Analysis
ADT vs Services Sector: How ADT Inc. Compares
How ADT Inc. compares to Services sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is ADT Inc. Stock Overvalued? ADT Valuation Analysis 2026
Based on fundamental analysis, ADT Inc. has mixed fundamental signals relative to the Services sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
ADT Inc. Balance Sheet: ADT Debt, Cash & Liquidity
ADT Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: ADT Inc.'s revenue has remained relatively flat over the 5-year period, with a 4% decline. The most recent EPS of $0.53 reflects profitable operations.
ADT Revenue Growth, EPS Growth & YoY Performance
ADT Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $1.2B | $127.2M | N/A |
| Q2 2025 | $1.2B | $92.4M | N/A |
| Q1 2025 | $1.2B | $91.6M | N/A |
| Q3 2024 | $1.2B | -$86.2M | N/A |
| Q2 2024 | $1.2B | -$26.6M | N/A |
| Q1 2024 | $1.2B | $91.6M | N/A |
| Q3 2023 | $1.2B | -$18.1M | N/A |
| Q2 2023 | $1.6B | -$26.6M | N/A |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
ADT Inc. Dividends, Buybacks & Capital Allocation
ADT SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for ADT Inc. (CIK: 0001703056)
📋 Recent SEC Filings
❓ Frequently Asked Questions about ADT
What is the AI rating for ADT?
ADT Inc. (ADT) has a Combined AI Rating of HOLD from Claude (HOLD) and ChatGPT (HOLD) with 70% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ADT's key strengths?
Claude: Strong free cash flow generation of $1.7B with 33.3% FCF margin, indicating efficient cash conversion. Improving profitability with net income growth of +18.9% YoY despite modest revenue growth of +4.7%. ChatGPT: Strong free cash flow generation with $1.71B of FCF and a 33.3% FCF margin. Healthy operating profitability, including a 25.5% operating margin and 11.6% net margin.
What are the risks of investing in ADT?
Claude: High financial leverage with 2.06x Debt/Equity ratio and $7.8B long-term debt representing 49% of total assets. Weak liquidity position with current ratio of 0.93x and minimal cash reserves of $80.8M relative to debt obligations. ChatGPT: High leverage, with $7.80B in long-term debt and debt-to-equity of 2.06x. Tight liquidity, as shown by current and quick ratios of 0.93x.
What is ADT's revenue and growth?
ADT Inc. reported revenue of $5.1B.
Does ADT pay dividends?
ADT Inc. pays dividends, with $186.8M distributed to shareholders in the trailing twelve months.
Where can I find ADT SEC filings?
Official SEC filings for ADT Inc. (CIK: 0001703056) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ADT's EPS?
ADT Inc. has a diluted EPS of $-0.57.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is ADT a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, ADT Inc. has a HOLD rating with 70% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is ADT stock overvalued or undervalued?
Valuation metrics for ADT: ROE of 15.8% (sector avg: 16%), net margin of 11.6% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
Should I buy ADT stock in 2026?
Our dual AI analysis gives ADT Inc. a combined HOLD rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is ADT's free cash flow?
ADT Inc.'s operating cash flow is $1.9B, with capital expenditures of $175.7M. FCF margin is 33.3%.
How does ADT compare to other Services stocks?
Vs Services sector averages: Net margin 11.6% (avg: 10%), ROE 15.8% (avg: 16%), current ratio 0.93 (avg: 1.5).
Is ADT Inc. carrying too much debt?
ADT has a debt-to-equity ratio of 2.06x, which is above the Services sector average of 0.7x. Combined with a current ratio below 1, this warrants careful monitoring of the balance sheet.