We recently compiled a list of the 12 Best Internet of Things Stocks To Buy According to Analysts. In this article, we are going to take a look at where ADT Inc. (NYSE:ADT) stands against the other IoT stocks.
Trends and Outlook for The Internet of Things Industry
According to the IOT analytics, 2024 was a poor year for the Internet of Things sector, particularly due to the headwinds from the hardware sector. As per the report published on January 15, many IoT-centric industries experienced stunted year-over-year growth. The industrial software market grew 12% year-over-year, slightly slower than the growth in 2023, whereas the industrial hardware industry experienced market declines. However, despite the slowdown the number of IoT connected devices grew around 13% year-over-year, surpassing 18 billion. In addition, the expertise spending related to IoT also increased by 10% year-over-year to reach $298 billion in 2024. The report also highlighted that the discussion on IoT remained high among leading CEO’s of the technology industry. The public relevance of the term Internet of Things remained within 30% of its all-time high in 2022.
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Moreover, another report by McKinsey & Company states that IoT can offer significant economic value potential. The report highlights that IoT can unlock $5.5 trillion to $12.6 trillion in economic value by consumer IoT products and services. McKinney & Company predicts that the most economic value of the technology will come from its deployment in industrial environments including manufacturing, health care, and other areas. Factory setting is expected to be the largest beneficiary by generating around $1.4 trillion to $3.3 trillion by 2030, or 26% of the total value. Lastly, the perceived value of IoT, the technological advancements, and the emergence of 5G in Networking are anticipated to be the prominent tailwinds for the sector.
Our Methodology
To compile the list of the 12 best Internet of Things stocks to buy according to analysts we used the Global X Internet of Things ETF. Using the ETF we aggregated a list of IoT stocks with positive analyst upside potential (at least 10%), sourced from CNN. Lastly, we ranked the stocks in ascending order of the analyst upside potential. Please note that the data was retrieved on Monday, 17th February, 2025.
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A technician demonstrating a security solution for a corporate office.
ADT Inc. (NYSE:ADT)
Analyst Upside Potential: 18.89%
ADT Inc. (NYSE:ADT) is a technology company that provides Internet of Things solutions for homes and businesses. Its offerings include Security Services, through burglar alarms, life safety alarms, smart security cameras, and video surveillance systems, Smart Home Automation, and Solar Solutions. On December 12, Morgan Stanley raised the price target on the stock from $8.5 to $9, while keeping its Equal Weight rating. The firm sees improving consumer credit and rebounding capital markets in 2025, therefore it is bullish on Business and Education Services companies.
During the fiscal third quarter of 2024, ADT Inc. (NYSE:ADT) reported a 5% increase in total revenue to $1.2 billion, driven by higher average prices and increased sales volume. The company also reached record-high monthly recurring revenue of $359 million, up 2%, benefiting from strong customer retention with gross revenue attrition at 12.8%. The company has launched its proprietary ADT+ platform across the US, offering enhanced smart home integrations and flexibility. Moreover, in August, ADT Inc. (NYSE:ADT) introduced a new feature that allows customers to grant secure access for package delivery or urgent issues like water leaks using various methods such as codes or biometric locks. It is set to announce its full-year results on February 27.
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.”
Overall ADT ranks 6th on our list of the best IoT stocks to buy according to analysts. While we acknowledge the potential of ADT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ADT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
