ADT Outpaces Peers as State Farm Sits on a Fifth of the Float

ADT gained 1.2% over the past week while its closest correlated peers lost ground collectively, with the median peer down 1.3%. That divergence is modest but worth noting given how lopsided the ownership structure has become at this company.

The most distinctive feature of ADT's positioning right now is who owns it. State Farm Mutual Automobile Insurance Company holds 19.72% of the company on its most recent Schedule 13D/A filing, up from 18.09% previously, and filed under an activist designation. That puts a single insurance company in control of nearly one share in five. State Farm's stake is disclosed as-last-filed around the 5% threshold event that triggered the 13D, and positions can change without a follow-on filing, but the trajectory has been steadily upward across three filings since April 2025. BlackRock has been building too, lifting its position to 10.3% per its August 2026 13G/A. Together those two holders account for roughly 30% of the company.

Short positioning sits firmly in the background by comparison. ADT's short interest is 3.2% of the free float, a level that has drifted lower over the past month, down roughly 9% from where it was in late September, even as it ticked up about 2.7% on the week. The borrow market is essentially open: availability has been running above 8,000% of short interest, meaning there are roughly 478 million shares available to lend against the 24 million currently shorted. Cost to borrow has crept up 66% over the past week but still sits at just 0.55%, firmly in the low-cost range. Nothing in the lending market points to meaningful short conviction.

Options positioning has loosened relative to recent history. The put/call ratio is 1.49, which sounds elevated in isolation but is actually running below its 20-day average of 1.60, roughly 1.6 standard deviations lighter on puts than usual. That relative easing, from a base that was already put-heavy, suggests options traders have become marginally less cautious rather than more so heading into next week's earnings on November 3.

On valuation, ADT trades at a PE of around 7.1 and an EV/EBITDA of 4.7, both of which have expanded modestly over the past month. The earnings yield ranks in the 92nd percentile of the ORTEX universe, and the EV/EBIT factor score is in the 80th percentile, so the stock screens cheaply relative to most names. The mean analyst target is $8.13 against a current price of $6.87, implying roughly 18% to the Street's consensus. Morgan Stanley lowered its target to $7.25 from $7.75 on October 13, maintaining an Equal-Weight rating, while Citi holds a Buy with a $8.50 target. The direction of recent analyst revisions has generally been downward, even where the rating has held. Wikipedia attention has spiked, with a z-score of 2.4 against its own 90-day history as of October 12, suggesting retail interest picked up ahead of the earnings date.

Peers were largely weaker on the week. BFAM gained 2.2% but EDU fell 5.2%, GHC dropped 3.2%, and HRB slipped 0.9%, leaving ADT at the positive end of a scattered peer group.

The November 3 earnings report is the date that resets all of these signals. The most recent print, on October 23, produced a 1.6% one-day decline. The print before that, in late July, generated a 3.1% gain. With short interest low, borrow loose, and State Farm entrenched as the dominant shareholder, the degree to which the quarterly figures move analyst targets will determine whether the valuation discount starts to close.