ADT Slides Back, Disappointing Results, Poor Commercial Performance
While ADT had an incredible start to the week, driven by the Google investment, ADT has since slid back, now disappointing investors plus poor commercial performance.
In this note, we examine why ADT's stock price has slid, including their reliance on residential and challenges to penetrate commercial, as well as their most important growth factor, recurring revenue, decreasing as well.
Overview – ****** ************
*** ****** ********* ******* **** ************** * ***** **** ******** ****:
* *** **** ** $*** *******, compared ** ***** ****’* *** **** of $*** ******* *** ***** ******* 2020 *** **** ** $*** *******.
********, *** *** ******* ******* ** $5.05–5.3 ******* *** ******** ******** $*.** billion ** ***** **** **** ********** projected.
Stock ***** ********
***** ***'* ***** ****** **** ***** $9 * ***** ** * ***** Monday **** ** $**+, *** *******'* stock ** *** **** ***** $**. While ***** ** ******** ** ~**%, the ***** ******* ******* ***** **** it ***** ** ** ****.
Recurring ******* (*&*) ****
*** ******* ********* ******* **** ******** to **** ** * "********* ** M&S *******". *&* (********** *** ********) is *** **** ********* ******* ** ADT's ******* *** ****** ********* ** home ******** *** **********, ** *** company *****% ** *********.
********* ******* **** *% **** **** year, * ******** **** ******* ******* revenue ***** ** *% **** **** year:
***** ******* *** $*,*** *******, ** 4%, ** $** ******* ****-****-****. ********** and ******* ******** ******* (“*&* *******”), which ********* $*,*** ******* ** ***** revenue, *** **** *%, ** $** million **** *** **** ****** **** year.
*******, **** *** ******* ** ***** "best ** ********" ******** ***** ** over *,*** ** ** ************* *** maintenance *** **** ** **** ********* and **** *********** ******* **** ***.
Commercial **** "********, *** **********"
*** **********, ***** *** *** **** investing ******* ** *** **** *** years **** ******** ************, *** **** 14% ** ** **** **** ****, but ***'* *** ****** *** **** "deferred, *** **********" ***********.
*******, *********** *** * ***** ****** in **** * ******* **** *** company ** ************:
** ******* *** ****** **** ** commercial **** * **% ******* ****** rate ******* ******** ****** ********* ** March ** *****-** ******* **** **** play *** ** ***** *** ******* with *% ******* ******.
** *** '** ********** ***** *******' chart *****, ********** ******* ******* **** 16% ** **** **** *******, * clearly ************* ******:
******, *** ********** **** ****** ********** with *** ********** ******** *** *** rest ** *** ****, ******:
*****, ** ****** ******** ** ****** and ******* *********** ******* *** ********* of *** ****, ****’* ***** **** our ********.
*******, *** ********** **** *** ***** bullish **** **** ***** **********:
**’** ***** **** **** ** ******** ADT ********** ** ** **** ******** over *** **** ****. ** *** focused ** *** *********** ** *** Hawk. ** *** * *** ******* milestone **** ********* **** **** *******. We ******** ** **** ** ****-** M&A, **** ******* **** ** *** ongoing ******** **** *** ** *** opportunistically ********* ***** *******.
*******
*** ****** ********** *** ******* * bolster *** *** ********* *******. *******, the ****** ********* ***** *** *********** questions ***** *** **** *** **** do ** **** *** *********** *** commercial **********.
Vote / ****
*** **** ****** ** * ***** investor, **** *** *** ******** ** ADT ********** ** *********** ***** ******* in ****** ** ***'* ***** ** things ***'* *******. ****** * **** to ******* **** ***-**** *********** *** ADT, ***. * ***** **** *** in **** ******** **** ****.
* ***** ******** ******* *'* ******** it **** ** **** ***** ******* some ********** *******.
****** **** ******** ** *** ****** Back…. ***** ** *** ****/****** ************** **** *******, *** ***. * ***-**** **** ** ***** produces **** ***** ** ******* ******* and ********. **********, *** **** ************ can ****-**** **** ***** ** ********* revenue & ********. *** ***** ******* to **** ** ***** **** ******** “unit” ********* (*** ****** “*******” *********). For *******, *** *** ****** **** in *** *********** *****, ***********/****, ******* their ******** **** ********* **** ** or **** **%, * ***** ************ to ***** ****** **********. *** ***** refuses ** ****** ***** **** ******** unit *********, ***** ** ******* ** above **%, *** *** ******** **.*%. (industry ******* ** *-**%).** *** ****, *** **** **** cost ** ********* **** **** ****** RMR ******** ********* *** ******* **** RMR ************ ******** ******. >>******: *** *****; ******* ******** *****
*** **** ***** *** ***** ** do ** ***** **** *** **** when **** **** ***** ***** ** do ***** ***********. **** **** ********** fix ***** ******* **** ****.
** **** ** **** **** *** hanging ***** *** ** **** *** doomed.