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ADT

ADT
62
Security & Protection Services · Industrials
Winston Score
62
Winston is curious
A decent business — some strong pillars, some weaker.

ADT Inc. is a home and business security company. It sells alarm systems, cameras, smart locks, and monitoring services to homeowners and small businesses across the United States. ADT is one of the oldest and largest security brands in the country, with roots going back to 1874.

ADT makes most of its money through recurring monthly fees that customers pay for professional monitoring — meaning ADT watches for break-ins, fires, and other emergencies around the clock. The company operates almost entirely in the U.S. and has roughly 6 million customers under contract. Its main competitive advantage is its large installed base and brand recognition, though it faces growing competition from cheaper DIY options like Ring and SimpliSafe. The key risk is customer cancellations, called "attrition," which can be costly because ADT spends heavily upfront to install equipment before earning back that cost over time through monthly fees.

Winston Score History

Politician Trades

3 trades / 12mo

1 Congressional buy and 2 sells on ADT in the last 12 months.

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+0.9% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+31.2% YoY

YoY Growth Rate

Strong earnings growth

Insider Activity

21.1%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$119M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

ADT is growing revenue at 1% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin
54.0%
Healthy — 54.0% gross margin
Operating Margin
25.5%
Excellent — 25.5% operating margin
ROCE
2.8%
Weak — 2.8% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY
+3.3%
Slow sales growth (3.3% YoY)
EPS YoY
+26.2%
Earnings growing fast (26.2% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency
6/8 quarters
Earnings grew in most of the last 8 quarters

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Cash Flow

Cash Conversion
330%
Turns 330% of profit into real cash
FCF Margin
34.8%
Converts sales into free cash efficiently (34.8%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity
2.02
Heavy debt load (2.02)
Interest Cover
3.23x
Tight — interest eats into profit (3.2x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

P/E Ratio (TTM)
8.8x
no trend
Attractive valuation — P/E 8.8

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward
+1.3
GROWING
Earnings expected to grow — slightly cheaper on forward P/E

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Dividends

Dividend Yield
3.22%
no trend
Moderate income — 3.22% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth
+0.0%
no trend
Dividend flat

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