ADT - Embedded Expectations Analysis - 2021 08 11
ADT Inc. (ADT:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with an 11.8x Uniform P/E, implying bearish expectations for the firm. Although management's concerns about EBITDA, their customer churn, and Signal Chat suggest the potential for near-term headwinds, market expectations are too bearish, suggesting outperformance is likely.Specifically, management may lack confidence in their ability to compete and win in the smart home business, develop innovative new products and services, and control their customer churn. Moreover, they may be exaggerating the potential of Signal Chat and their partnership with Google. In addition, management may lack confidence in their ability to improve their adjusted EBITDA, and they may have concerns about the extent of the pandemic's impact on their business and relocation cancellation headwinds.
ADT is a provider of monitored security and interactive home and business automation solutions in the United States and Canada. The company's monitored security and automation offerings involve 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. The company's products and services include interactive technologies to allow its customers to remotely monitor and manage their residential and commercial environments by adding automation capabilities to its monitored security systems.
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