ADT
ADT Inc.
$6.70
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 68.5% below fair value
You pay
$6.70
Bear
$17.21
Fair
$21.28
Bull
$24.89
Bear
$17.21
+156.9%
3% stage 1 growth, 11% discount
Fair
$21.28
+217.7%
5% stage 1 growth, 11% discount
Bull
$24.89
+271.5%
6% stage 1 growth, 11% discount
Adjust Assumptions
4.9%
11.0%
3.0%
Key Value Driver
FCF growth rate (5% base case)
Terminal Value % of EV
34%
Implied Market Multiple
8.0x
Market is pricing in (growth)
-3.8%
vs 4.9% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (17 analysts)
$7.38
Divergence from AlphaVal
188%
Summary
Using a two-stage FCF DCF with 5% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $21.28 per share.
Warnings
Wall Street's average price target is $7.38 (from 17 analysts). Our estimate is 188% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions