(ADP) Automatic Data Processing - Overview
Stock: Payroll, HCM Platform, HR Outsourcing, PEO
EPS (Earnings per Share)
Revenue
Dividends
| Dividend Yield | 2.19% |
| Yield on Cost 5y | 5.22% |
| Yield CAGR 5y | 13.34% |
| Payout Consistency | 100.0% |
| Payout Ratio | 49.5% |
| Risk 5d forecast | |
|---|---|
| Volatility | 18.2% |
| Relative Tail Risk | -1.15% |
| Reward TTM | |
|---|---|
| Sharpe Ratio | -0.99 |
| Alpha | -27.45 |
| Character TTM | |
|---|---|
| Beta | 0.557 |
| Beta Downside | 0.510 |
| Drawdowns 3y | |
|---|---|
| Max DD | 23.48% |
| CAGR/Max DD | 0.25 |
Description: ADP Automatic Data Processing January 28, 2026
Automatic Data Processing, Inc. (NASDAQ:ADP) delivers cloud-based human capital management (HCM) solutions through two operating segments. The **Employer Services** segment offers a suite of platforms-including RUN Powered by ADP for small-business payroll, ADP Workforce Now for mid-size and large enterprises, and ADP Lyric HCM for integrated HR, payroll, talent and analytics. The **Professional Employer Organization (PEO)** segment, branded ADP TotalSource, provides co-employment HR outsourcing, benefits administration, risk-management and compliance tools.
In FY 2023 ADP generated **$16.5 billion in net revenue**, a **7 % year-over-year increase**, and processed roughly **$1.5 trillion in payroll** for over **800,000 client accounts** worldwide. Operating margin held steady near **14.5 %**, and diluted earnings per share rose to **$13.15**. The company’s cash flow conversion remained robust, delivering $2.9 billion of free cash flow, underscoring its ability to fund ongoing cloud-platform investments.
Key macro and sector drivers include: (1) a persistently tight U.S. labor market that fuels demand for sophisticated payroll and compliance tools; (2) accelerating corporate migration to cloud-native HCM systems, which benefits ADP’s subscription-based revenue model; and (3) evolving regulatory requirements (e.g., state-level wage-hour rules and benefits mandates) that increase the value of ADP’s risk-management and advisory services. Sensitivity to wage-growth trends and employment-rate fluctuations should be monitored, as they directly affect transaction volumes and pricing power.
For a deeper quantitative view of ADP’s valuation dynamics, you may find a quick scan on ValueRay useful.
Piotroski VR‑10 (Strict, 0-10) 5.5
| Net Income: 4.24b TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.05 > 0.02 and ΔFCF/TA -1.39 > 1.0 |
| NWC/Revenue: 10.99% < 20% (prev -0.24%; Δ 11.23% < -1%) |
| CFO/TA 0.06 > 3% & CFO 4.74b > Net Income 4.24b |
| Net Debt (2.21b) to EBITDA (6.46b): 0.34 < 3 |
| Current Ratio: 1.03 > 1.5 & < 3 |
| Outstanding Shares: last quarter (404.7m) vs 12m ago -1.05% < -2% |
| Gross Margin: 48.36% > 18% (prev 0.50%; Δ 4786 % > 0.5%) |
| Asset Turnover: 28.53% > 50% (prev 31.05%; Δ -2.53% > 0%) |
| Interest Coverage Ratio: 13.31 > 6 (EBITDA TTM 6.46b / Interest Expense TTM 446.6m) |
Altman Z'' 2.06
| A: 0.03 (Total Current Assets 74.47b - Total Current Liabilities 72.14b) / Total Assets 84.64b |
| B: 0.31 (Retained Earnings 25.99b / Total Assets 84.64b) |
| C: 0.08 (EBIT TTM 5.94b / Avg Total Assets 74.37b) |
| D: 0.32 (Book Value of Equity 25.42b / Total Liabilities 78.25b) |
| Altman-Z'' Score: 2.06 = BBB |
Beneish M -3.15
| DSRI: 0.91 (Receivables 3.41b/3.50b, Revenue 21.21b/19.90b) |
| GMI: 1.04 (GM 48.36% / 50.20%) |
| AQI: 0.78 (AQ_t 0.11 / AQ_t-1 0.14) |
| SGI: 1.07 (Revenue 21.21b / 19.90b) |
| TATA: -0.01 (NI 4.24b - CFO 4.74b) / TA 84.64b) |
| Beneish M-Score: -3.15 (Cap -4..+1) = AA |
What is the price of ADP shares?
Over the past week, the price has changed by -4.11%, over one month by -2.10%, over three months by -3.11% and over the past year by -17.66%.
Is ADP a buy, sell or hold?
- StrongBuy: 2
- Buy: 2
- Hold: 13
- Sell: 1
- StrongSell: 0
What are the forecasts/targets for the ADP price?
| Issuer | Target | Up/Down from current |
|---|---|---|
| Wallstreet Target Price | 280.7 | 13.4% |
| Analysts Target Price | 280.7 | 13.4% |
| ValueRay Target Price | 260.9 | 5.4% |
ADP Fundamental Data Overview January 31, 2026
P/E Forward = 22.4719
P/S = 4.7056
P/B = 15.5054
P/EG = 2.9365
Revenue TTM = 21.21b USD
EBIT TTM = 5.94b USD
EBITDA TTM = 6.46b USD
Long Term Debt = 3.98b USD (from longTermDebt, last quarter)
Short Term Debt = 307.5m USD (from shortTermDebt, last quarter)
Debt = 4.63b USD (from shortLongTermDebtTotal, last quarter)
Net Debt = 2.21b USD (from netDebt column, last quarter)
Enterprise Value = 101.99b USD (99.83b + Debt 4.63b - CCE 2.47b)
Interest Coverage Ratio = 13.31 (Ebit TTM 5.94b / Interest Expense TTM 446.6m)
EV/FCF = 22.19x (Enterprise Value 101.99b / FCF TTM 4.60b)
FCF Yield = 4.51% (FCF TTM 4.60b / Enterprise Value 101.99b)
FCF Margin = 21.67% (FCF TTM 4.60b / Revenue TTM 21.21b)
Net Margin = 19.96% (Net Income TTM 4.24b / Revenue TTM 21.21b)
Gross Margin = 48.36% ((Revenue TTM 21.21b - Cost of Revenue TTM 10.96b) / Revenue TTM)
Gross Margin QoQ = 46.08% (prev 45.20%)
Tobins Q-Ratio = 1.20 (Enterprise Value 101.99b / Total Assets 84.64b)
Interest Expense / Debt = 2.68% (Interest Expense 124.1m / Debt 4.63b)
Taxrate = 23.21% (321.1m / 1.38b)
NOPAT = 4.56b (EBIT 5.94b * (1 - 23.21%))
Current Ratio = 1.03 (Total Current Assets 74.47b / Total Current Liabilities 72.14b)
Debt / Equity = 0.72 (Debt 4.63b / totalStockholderEquity, last quarter 6.39b)
Debt / EBITDA = 0.34 (Net Debt 2.21b / EBITDA 6.46b)
Debt / FCF = 0.48 (Net Debt 2.21b / FCF TTM 4.60b)
Total Stockholder Equity = 6.20b (last 4 quarters mean from totalStockholderEquity)
RoA = 5.69% (Net Income 4.24b / Total Assets 84.64b)
RoE = 68.28% (Net Income TTM 4.24b / Total Stockholder Equity 6.20b)
RoCE = 58.40% (EBIT 5.94b / Capital Employed (Equity 6.20b + L.T.Debt 3.98b))
RoIC = 36.01% (NOPAT 4.56b / Invested Capital 12.67b)
WACC = 7.71% (E(99.83b)/V(104.46b) * Re(7.97%) + D(4.63b)/V(104.46b) * Rd(2.68%) * (1-Tc(0.23)))
Discount Rate = 7.97% (= CAPM, Blume Beta Adj.)
Shares Correlation 3-Years: -100.0 | Cagr: -0.95%
[DCF Debug] Terminal Value 81.90% ; FCFF base≈4.51b ; Y1≈5.43b ; Y5≈8.75b
Fair Price DCF = 385.9 (EV 157.71b - Net Debt 2.21b = Equity 155.50b / Shares 403.0m; r=7.71% [WACC]; 5y FCF grow 21.84% → 2.90% )
EPS Correlation: 64.02 | EPS CAGR: 4.64% | SUE: 1.43 | # QB: 12
Revenue Correlation: 84.70 | Revenue CAGR: 4.69% | SUE: 0.75 | # QB: 0
EPS next Quarter (2026-03-31): EPS=3.30 | Chg30d=+0.028 | Revisions Net=+3 | Analysts=12
EPS current Year (2026-06-30): EPS=10.96 | Chg30d=+0.044 | Revisions Net=+1 | Growth EPS=+9.5% | Growth Revenue=+6.0%
EPS next Year (2027-06-30): EPS=11.92 | Chg30d=-0.021 | Revisions Net=+0 | Growth EPS=+8.8% | Growth Revenue=+5.8%