Will ADT Ever Get It Right?

ADT Inc. (NYSE: ADT) has seen its shares get more or less halved since it has been a public company. The firm originally came public in January 2018, but since then the stock has been on a steady decline. And this quarter seems to be only feeding the fire.

The firm released its fourth-quarter financial results after the markets closed on Monday, posting a net loss of $0.04 per share and $1.19 billion in revenue. The consensus estimates had called for $0.11 in earnings per share and $1.16 billion in revenue.

Monitoring and related services (M&S) revenue, which comprised $1.04 billion of total revenue, was up 3% over the same period of last year. The growth in M&S revenue was attributable to an increase in monthly recurring revenue, which resulted from the addition of new customers and improvements in average pricing, partially offset by customer attrition.

In addition to M&S revenue, installation and other revenue was up by an additional $52 million from last year, primarily driven by commercial revenues as a result of the successful execution of management’s commercial growth strategy.

Recurring monthly revenue, a primary driver of M&S revenue, grew by 2%, or 4% including Red Hawk, in the quarter over the same period of last year. Net growth in the core U.S. residential and commercial operations was offset by a decline in recurring monthly revenue attributable to the Canadian business.

Jim DeVries, ADT’s president and CEO, commented:

We continue to demonstrate improvement across key operating metrics and strengthened our leadership in leading-edge home automation through the launch of ADT Command and Control. Moreover, following the December acquisition of Red Hawk, which accelerated our expansion into the attractive commercial market, we recently added a new growth platform for our business through the acquisition of LifeShield.

Shares of ADT were last seen down 13% at $6.60, in a 52-week range of $5.88 to $10.80. The consensus price target is $11.89.

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