10 Worst Affordable Stocks Under $10

7. ADT Inc. (NYSE:ADT)

Share Price: $7.25

Forward P/E Ratio: 10.86 

Earnings Growth This Year: 33.30% 

Number of Hedge Fund Holders: 23 

ADT Inc. (NYSE:ADT) is a smart home and home security company operating in the United States. The company provides security systems inducing burglar alarms, life safety alarms, smart security cameras, and video surveillance systems. Moreover, it also provides home automation systems that allow customers to control lighting and security, remotely through mobile phones or online apps.

ADT Inc. (NYSE:ADT) has established itself as a trusted leader in the home security industry throughout the United States. The company has a vast customer base spanning over 6.4 million subscribers. Many differentiating factors help fuel the growth of the company, one of the major differentiating factors is the average retention time of customers. Users of ADT Inc.’s (NYSE:ADT) technology have an average retention time of more than 8 years, meaning the company generates a significant amount solely through its recurring revenue. It generates around $4.3 billion in annualized recurring monthly revenue.

In addition to this, the investment and growth case for the company is even more impressive. According to the US Census Bureau, around 59 million people had home security systems installed in their homes, this number is expected to grow at a CAGR of 8% to reach 85 million people by 2027. As ADT Inc. (NYSE:ADT) is one of the leading providers of security technologies, this growth in users will directly translate into the company gaining more customers.

Talking about the second quarter results of the company, its revenue grew 3% year-over-year to reach $1.2 billion, with adjusted free cash flow improving 14% during the same time. The stock was held by 23 institutional investors in Q2 2024, with total positions worth $407 million.

Ariel Fund stated the following regarding ADT Inc. (NYSE:ADT) in its Q2 2024 investor letter:

“Leading provider of automated security solutions ADT Inc. (NYSE:ADT) also traded up in the quarter. A top- and bottom-line earnings beat, highlighted by strong growth within the consumer and small business segment, low attrition, an improving payback period and margin expansion aided shares. Meanwhile, ADT sold its commercial business and is winding down its solar business to focus on profitability in the residential sector and pay down debt. We continue to believe ADT’s industry-leading brand and national presence, coupled with its Google and State Farm strategic partnerships, position it to be a prime beneficiary of growing demand for smart home technologies, including fully monitored residential security.”