Critical Comparison: ADT (NYSE:ADT) & SoundThinking (NASDAQ:SSTI)

ADT (NYSE:ADT) and SoundThinking (NASDAQ:SSTI) are both industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, analyst recommendations, profitability, dividends and valuation.

Analyst Recommendations

This is a summary of current recommendations and price targets for ADT and SoundThinking, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ADT	1	4	2	0	2.14
SoundThinking	1	3	3	0	2.29

ADT currently has a consensus price target of $8.38, indicating a potential upside of 25.73%. SoundThinking has a consensus price target of $14.00, indicating a potential upside of 108.02%. Given SoundThinking’s stronger consensus rating and higher probable upside, analysts plainly believe SoundThinking is more favorable than ADT.

Insider & Institutional Ownership

87.2% of ADT shares are held by institutional investors. Comparatively, 60.7% of SoundThinking shares are held by institutional investors. 2.7% of ADT shares are held by insiders. Comparatively, 10.4% of SoundThinking shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

ADT has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500. Comparatively, SoundThinking has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500.

Earnings and Valuation

This table compares ADT and SoundThinking”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ADT	$5.13 billion	1.07	$595.95 million	$0.66	10.10
SoundThinking	$104.13 million	0.84	-$9.42 million	($0.74)	-9.09

ADT has higher revenue and earnings than SoundThinking. SoundThinking is trading at a lower price-to-earnings ratio than ADT, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares ADT and SoundThinking’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ADT	11.60%	19.16%	4.43%
SoundThinking	-9.05%	-12.73%	-6.97%

Summary

ADT beats SoundThinking on 9 of the 14 factors compared between the two stocks.

About ADT

ADT Inc. provides security, interactive, and smart home solutions to residential and small business customers in the United States. It operates through two segments, Consumer and Small Business, and Solar. The company provides burglar and life safety alarms, smart security cameras, smart home automation systems, and video surveillance systems. It primarily offers security designed to detect intrusion, control access, sense movement, smoke, fire, carbon monoxide, flooding, temperature, and other environmental conditions and hazards; and address personal medical emergencies, such as injuries or unanticipated falls. The company also provides automation and smart home solutions that allow customers to use their smart phones, smart phone application, or touchscreen panels in their homes to arm and disarm their security systems; record and view real-time video; and creates customized and automated schedules for connected devices; programs systems to react to defined events; integrates system with third-party connected devices, such as cameras, lights, thermostats, appliances, and garage doors, as well as offers monitoring and maintenance services. In addition, the company offers energy storage solutions, energy efficiency upgrades, and roofing services. It offers its products under the ADT, ADT Pulse, ADT+, and ADT Commercial brand names. The company was formerly known as Prime Security Services Parent, Inc. and changed its name to ADT Inc. in September 2017. ADT Inc. was founded in 1874 and is headquartered in Boca Raton, Florida.

About SoundThinking

SoundThinking, Inc., a public safety technology company that provides transformative solutions and strategic advisory services for law enforcement and civic leadership. Its SafetySmart Platform, an integrated suite of data-driven tools that enable law enforcement and community violence prevention and health organizations to be efficient in public safety outcomes. It offers ShotSpotter, an acoustic gunshot detection system; CrimeTracer, a law enforcement search engine; CaseBuilder, an investigation management system; and ResourceRouter, a software that directs patrol and community anti-violence resources to help maximize their impact. The company sells its solutions through its direct sales teams. The company was formerly known as ShotSpotter, Inc. and changed its name to SoundThinking, Inc. in April 2023. SoundThinking, Inc. was founded in 1996 and is headquartered in Fremont, California.