ADT, Inc. (NYSE:ADT) – A Bull Case Thesis

We came across a bullish thesis on ADT, Inc. (ADT) ValueInvestorsClub by ril1212. VIC is our preferred site because the ideas there are generally posted by aspiring analysts who tend to think out of the box. We find the ideas presented on the site well-researched and worth a serious attention. Click here for the full article. Below we summarized the ADT bullish thesis:

The modern-day ADT, Inc. (ADT) is originally American District Telegraph founded in 1874. Its Founder Edward Callahan created a telegraph-based “call-box” to signal for assistance to a central office. He subsequently connected 50 other homes in the neighborhood, creating the first residential security system network.

ADT provides residential, small and large business electronic security, fire protection, and other related alarm monitoring services across the US. New York- based buyout firm Apollo Global Management acquired ADT in 2016 for approximately $6.9 billion.  ADT is the largest residential security firm in the United States, almost five times larger than the number 2 and 3 players. ADT went public in 2018.

Google Partnership

The company got a major booster shot to its already dominant position, when the partnership with Google was announced in August last year. Google investing $450 million in ADT equity, joint investment of $150 million by each party in marketing and development, and zero revenue sharing by Google are all part of a game changing partnership.

COVID’s Positive Impact

A positive consequence of COVID was increasing migration from urban areas to sub-urbans pushing new home sales higher, while existing home inventory stayed historically low. Major part of this migration comprises of young and affluent workers, who are more likely to opt for high-tech home security. Work from home, and little family travel has created extra liquidity for home upgrade and repair. This has not only enhanced the stability of ADT’s existing business, but would also yield organic growth as new connections for home security would rise and any disconnections would be comparatively low.


The analyst believed ADT trading at 8x EBITDA or 10x cash earnings was not truly reflecting the positive developments of Google partnership and housing macro tail winds. The prediction of stock price gain of 100% was posted on 19 August, 2020, when ADT was trading around $11.50.

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