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Investing.com - RBC Capital has reiterated its Sector Perform rating and $9.00 price target on ADT (NYSE:ADT) ahead of the company’s third-quarter 2025 earnings report. According to InvestingPro data, ADT appears undervalued, with analyst targets ranging from $9.00 to $10.40.
The firm expects ADT to deliver results in line with market expectations for Q3 2025 and to maintain its full-year 2025 guidance, though it notes growth is likely to moderate in the second half of 2025 due to more challenging comparisons in the Installation segment. The company has demonstrated solid performance with revenue growth of 6.6% and an impressive gross profit margin of 81.3% in the last twelve months.
RBC Capital highlights several positive factors that should support both revenue and profit growth, including continued adoption of ADT+, the company’s partnership with Google, ADT’s Remote Assistance program, and various artificial intelligence initiatives. The company’s overall financial health is rated as "GREAT" by InvestingPro, which offers dozens more exclusive insights and metrics in its comprehensive Pro Research Report.
The firm anticipates ADT will use its free cash flow and proceeds from the upcoming sale of its Multi-Family division to fund product innovation, dealer account acquisitions, bulk purchases, and opportunistic share repurchases during potential secondary offerings.
RBC Capital also suggests that removing the sponsor overhang could serve as a catalyst for the stock to achieve a higher valuation multiple.
In other recent news, ADT Inc. announced plans to issue $1 billion in first-priority senior secured notes through its subsidiary, The ADT Security Corporation. The notes, carrying a 5.875% interest rate and due in 2033, are part of a strategy to refinance existing debt. Alongside this, ADT intends to secure an additional $300 million in incremental first lien senior secured term loans to redeem $1.3 billion of its outstanding 6.250% second-priority senior secured notes due 2028. This financial maneuver aims to optimize the company’s debt structure by utilizing proceeds from the new notes, loans, and available cash. Additionally, entities managed by affiliates of Apollo Global Management have announced a secondary public offering of 71 million shares of ADT’s common stock. Underwriters have a 30-day option to purchase up to an additional 10.65 million shares from the selling stockholders. These recent developments reflect ADT’s ongoing efforts to manage its financial obligations and shareholder interests.
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