I’ve been digging into ADT Inc. (ADT) recently, and it looks like a great value/cash-flow play that the broader market isnt looking at cuz it isnt AI.
Here is why i think ADT looks like an incredibly solid value investment right now:
Their valuation is really cheap. The broader market is trading at high multiples, but ADT is sitting in the bargain bin with a P/E Ratio of around 9
At around ~$7 a share, the downside feels mitigated. It’s priced like its dying, but the fundamentals show it's not.
The free cash flow is flowing.
Gross Margin: 80.8%. Because the business model relies heavily on recurring monthly subscriptions, their gross margins are closer to a software company than a services company.
FCF Growth: In its recent quarterly reports, ADT’s Adjusted Free Cash Flow went up by over 80% year-over-year.
The free cash flow gives management flexibility to survive downturns and pay dividends.
the dividend yield is around 3.2% protected by the cash flow, making it compelling for compounding