ADT's business model proved its resilience over the past economic downturn. In 2008 and 2009, organic revenue continued to grow and operating margins expanded.
ADT's wide economic moat allows the firm to generate strong cash flows and ROICs around 20% with relatively little variability.
Newly introduced ADT Pulse expands the market opportunity and could lead to accelerated revenue growth over time, with an even stickier customer base. Read more
Telecom and cable companies could be successful in introducing competing interactive home monitoring and home control services, denting ADT's growth prospects and margins.
ADT has benefited from long customer tenure because of an exceptionally weak housing market. As more customers move because of an improved housing market, attrition will increase and returns decline.
ADT enjoys an unsustainably low cash tax rate in the single digits. Current free cash flows therefore misrepresent true long-term cash generation potential. Read more
Naren Gursahaney took over as CEO upon ADT's spin-off from Tyco in September 2012. Gursahaney served as the president of Tyco Security Solutions from 2007 to 2012, where he oversaw the global operations of ADT Worldwide. This deep understanding of the Read more
ADT was spun out from parent Tyco in September 2012. It provides home monitoring services, including burglary, fire, and carbon monoxide, to 6.5 million residences and small Read more
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