ADT: We Are Looking For Pullback As Buying Opportunity, Says Argus
In a research report published this morning, Argus analyst John Eade maintained a Hold rating on ADT Corp. (NYSE:ADT) with a $33 fair value.
Eade wrote, “ADT has faced increased competition in the past year and struggled with rising customer attrition rates and sluggish net customer growth. However, the third quarter reversed this trend in some ways, as attrition levels fell and the EBITDA margin improved. Still, EPS growth was driven by share buybacks. ADT is making progress in its Pulse service, which continues to grow, and the increased user base has contributed to a rise in average revenue per customer. The company has also invested in Life360, a mobile app developer, indicating it will be making further strides to upsell current customers to higher-priced service packages. The shares appear fairly valued in the mid-30s. They are selling at a discount to the peer group, as management tries to regain credibility with the Street after a recent earnings miss.”
The analyst added, “We will likely wait for higher-quality EPS growth as a trigger to move the ADT shares back to the BUY list.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst John Eade has a total average return of 20.5% and a 92.9% success rate. Eade is ranked #56 out of 3311 analysts.