ADT’s fourth quarter report stunned the public with a surprising adjusted loss since going public back in January. The majority of analysts forecasted earnings of 14 cents per share on revenue in the neighborhood of $1.09 billion. On a GAAP basis, ADP earned 99 cents per share ($638 million) in revenue, including a $690 million boost due to recent tax legislation, yet ADT lost 6 cents per share after removing one-time items from the equation. When all was said and done, ADT’s revenue grew roughly 6% from $1.09 billion to $1.11 billion.
Summary Since January IPO
In short, ADT has struggled since going public in January. The security firm, backed by Apollo, debuted at $14/share at their IPO, yet was most recently quoted at $9.03/share, which is a 23% decrease in the last month alone, which does not correlate with the S&P index, which has improved by 0.7% in the same time frame.
Competing with Amazon
This drastic plunge could be in response to Amazon’s (AMZN) acquisition of Ring. In addition to laying claim to Ring, Amazon has sought out a number of smaller acquisitions and organic efforts as the e-commerce giant continues to build their smart home product footprint. Every step that Amazon takes to establish their brand as a dominant force in the market and mind share juggernaut in the mind of consumers is another obstacle impeding ADT’s success and growth.
While Amazon is clearly making moves to increase their foothold in the smart home sector, ADT isn’t just sitting there and twiddling their thumbs. The Bocca Raton-based security firm recently absorbed Acme Security Systems. ADT is also set to merge with Aronson Security Group.
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