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How ADT's Stock Is Benefiting From Its Planned Divestment Of Canadian Business

ADT (NYSE: ADT), a leading provider of monitored security and interactive home and business automation solutions, saw its stock rise by about 23% over the last month. The rally is likely being driven by the company’s move to sell its Canadian operations for about C$700 million ($535 million) to Telus, a Canadian telecom company. The company indicated that the divestment of the Canadian operations, which were more capital intensive, should enable it to focus its efforts on higher-margin opportunities in the United States. Separately, the company will also be paying out a special dividend following the close of the deal. Below, we take a look at some of the key drivers of ADT’s performance over the last few years and what lies ahead for the company. We note that our forecasts are not updated for the proposed divestment.

View our interactive dashboard analysis on Why Has ADT Stock Rallied This Month?

How does ADT’s Revenue Growth in 2018 compare with that in prior periods and what’s the forecast?

Total Revenues for ADT moderately increased from $4.32 Bil in 2017 to $4.58 Bil in 2018; an increase of 6.17%.

This compares with Total Revenues growth of 46.3% in 2017 compared to 2016, as ADT was acquired by Apollo Global Management, which combined it with some smaller security companies in its portfolio. The company was brought public again the beginning of 2018.

We expect Total Revenues growth to be 11% in 2019.

How does ADT’s Total Expense in 2018 compare with that in prior periods and what’s the forecast?

Total Expense for ADT increased from $4.74 Bil in 2017 to $5.21 Bil in 2018; an increase of 10.1%.

This compares with Total Expense growth of 26.2% in 2017 compared to 2016.

We expect Total Expense growth to be 6.3% in 2019.

How does ADT’s EBT in 2018 compare with that in prior periods and what’s the forecast?

EBT for ADT decreased substantially from -$422 Mil in 2017 to -$633 Mil in 2018.

We expect EBT to stand at -$445 million in 2019.

How do ADT’s Net Income and EPS in 2018 compare with that in prior periods and what’s the forecast?

For more details on ADT’s Net Income and EPS, view our interactive dashboard analysis.

 

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