The ADT Corp

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ADT : NYSE : Services
$41.98 up 0.03 | 0.07%
Today's Range: 41.95 - 41.98
Avg. Daily Volume: 5,024,500
04/29/16 - 4:00 PM ET

Financial Analysis


ADT CORP's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. ADT CORP has very weak liquidity. Currently, the Quick Ratio is 0.25 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has decreased by 5.89% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)900.0887.0
EBITDA ($mil)458.0456.0
EBIT ($mil)169.0181.0
Net Income ($mil)64.072.0


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)75.070.0
Total Assets ($mil)10711.010660.0
Total Debt ($mil)5401.05258.0
Equity ($mil)2905.03087.0


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin87.5687.26
EBITDA Margin50.8851.4
Operating Margin18.7820.41
Sales Turnover0.330.32
Return on Assets2.682.8
Return on Equity9.919.68
Debt Q1 FY16 Q1 FY15
Current Ratio0.60.66
Debt/Capital0.650.63
Interest Expense53.050.0
Interest Coverage3.193.62


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)165.29171.74
Div / share0.210.2
EPS0.390.41
Book value / share17.5717.97
Institutional Own % n/a n/a
Avg Daily Volume4986656.01910888.0

Valuation


HOLD. ADT CORP's P/E ratio indicates a discount compared to an average of 28.32 for the Commercial Services & Supplies industry and a value on par with the S&P 500 average of 23.99. To use another comparison, its price-to-book ratio of 2.39 indicates a discount versus the S&P 500 average of 2.74 and a significant discount versus the industry average of 4.57. The current price-to-sales ratio is similar to the S&P 500 average, but it is below the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, ADT CORP proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
ADT 24.53 Peers 28.32   ADT 4.28 Peers 13.75

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

ADT is trading at a discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

ADT is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
ADT 18.98 Peers 23.38   ADT 1.24 Peers 3.76

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

ADT is trading at a discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

ADT trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ADT 2.39 Peers 4.57   ADT 1.18 Peers 14.00

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

ADT is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, ADT is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
ADT 1.93 Peers 2.00   ADT 3.79 Peers 1.98

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

ADT is trading at a valuation on par with its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

ADT has a sales growth rate that significantly exceeds its peers.

 

 

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