Analysis
Is ADT Equity "cheap" at 6.5x forward EBITDA, while some comparables trade at 9x or more? Well, that depends on whether its price will trade at a higher or lower multiple in the future, say in 1 year, 2 years, or 5 years. And as it does today, its multiple then may depend on the outlook at that time for peak economics, which may drive the outlook for cash production over the long-term. In the chart below, hover over 1 of the 100 cases in any of the 4 time horizons to see the outlook at that time. Click a case to zero in on it. And select horizons at the bottom to zero in on them too. Explore what could drive revenue multiple to, for example, above our 90th percentile of 12.0x in 5 years or below our 10th percentile of 0.5x. If you are reading this on a smart phone, flipping to landscape mode will help.