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ADT (ADT) Gains But Lags Market: What You Should Know

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ADT (ADT - Free Report) closed at $7.12 in the latest trading session, marking a +0.56% move from the prior day. This move lagged the S&P 500's daily gain of 1.68%. At the same time, the Dow added 1.06%, and the tech-heavy Nasdaq lost 1.7%.

Heading into today, shares of the home security company had lost 15.11% over the past month, lagging the Industrial Products sector's loss of 5.79% and the S&P 500's loss of 6.68% in that time.

Investors will be hoping for strength from ADT as it approaches its next earnings release. The company is expected to report EPS of $0.13, up 1400% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.62 billion, up 5.13% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.74 per share and revenue of $6.67 billion. These totals would mark changes of +208.33% and +4.35%, respectively, from last year.

Any recent changes to analyst estimates for ADT should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 5.56% lower within the past month. ADT is currently a Zacks Rank #5 (Strong Sell).

Investors should also note ADT's current valuation metrics, including its Forward P/E ratio of 9.57. Its industry sports an average Forward P/E of 18.03, so we one might conclude that ADT is trading at a discount comparatively.

The Security and Safety Services industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 62, which puts it in the top 25% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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