(ADP) Automatic Data Processing - NASDAQ
Sector: Technology | Industry: Software - Application | Exchange: NASDAQ (USA) | Market Cap: 87.306m USD | Total Return: -28.9% in 12m
Avg Turnover: 581M
EPS Trend: 99.6%
Qual. Beats: 9
Rev. Trend: 100.0%
Qual. Beats: 1
Warnings
Below Avwap Earnings
Tailwinds
Confidence
Automatic Data Processing, Inc. (ADP) is a global provider of cloud-based human capital management (HCM) solutions, operating primarily through its Employer Services and Professional Employer Organization (PEO) segments. The company delivers integrated platforms for payroll, HR, compliance, and talent management, catering to organizations ranging from small businesses to large multinational enterprises.
The HCM industry is characterized by high switching costs and recurring revenue models, as businesses often integrate these platforms deeply into their core operational workflows. ADP’s PEO model utilizes a co-employment structure, allowing smaller organizations to aggregate their employee base to access enterprise-level benefits and risk management resources typically reserved for larger corporations.
Investors may find further insights into ADPs long-term valuation trends by reviewing the historical data available on ValueRay.
Founded in 1949 and headquartered in New Jersey, ADP maintains a significant market position within the Human Resource & Employment Services sub-industry by leveraging its proprietary software platforms, such as ADP Workforce Now and ADP Lyric HCM, to automate administrative employee lifecycles.
- Interest rate fluctuations impact earnings on client funds held for payroll processing
- Global employment levels and wage growth drive HCM software subscription revenue volume
- PEO segment margins depend on healthcare cost trends and workers compensation claims
- Expansion of cloud-based platforms increases recurring service revenue and operating leverage
- Regulatory changes in labor compliance drive demand for outsourced HR management solutions
| Net Income: 4.35b TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.08 > 0.02 and ΔFCF/TA -0.02 > 1.0 |
| NWC/Revenue: 10.25% < 20% (prev 3.42%; Δ 6.83% < -1%) |
| CFO/TA 0.08 > 3% & CFO 5.45b > Net Income 4.35b |
| Net Debt (1.39b) to EBITDA (6.51b): 0.21 < 3 |
| Current Ratio: 1.04 > 1.5 & < 3 |
| Outstanding Shares: last quarter (402.3m) vs 12m ago -1.52% < -2% |
| Gross Margin: 47.48% > 18% (prev 50.30%; Δ -2.82% > 0.5%) |
| Asset Turnover: 35.72% > 50% (prev 35.79%; Δ -0.07% > 0%) |
| Interest Coverage Ratio: 13.33 > 6 (EBIT TTM 6.02b / Interest Expense TTM 451.9m) |
| A: 0.03 (Total Current Assets 54.2b - Total Current Liabilities 52.0b) / Total Assets 64.5b |
| B: 0.41 (Retained Earnings 26.7b / Total Assets 64.5b) |
| C: 0.10 (EBIT TTM 6.02b / Avg Total Assets 60.5b) |
| D: 0.11 (Book Value of Equity 6.35b / Total Liabilities 58.1b) |
| Altman-Z'' = 2.36 = BBB |
| DSRI: 0.94 (Receivables 3.57b/3.55b, Revenue 21.6b/20.2b) |
| GMI: 1.06 (GM 50.30% / 47.48%) |
| AQI: 0.95 (AQ_t 0.15 / AQ_t-1 0.16) |
| SGI: 1.07 (Revenue 21.6b / 20.2b) |
| TATA: -0.02 (NI 4.35b - CFO 5.45b) / TA 64.5b) |
| Beneish M = -3.00 (Cap -4..+1) = AA |
As of June 23, 2026, the stock is trading at USD 214.60 with a total of 2,335,165 shares traded. Over the past week, the price has changed by -5.13%, over one month by -4.03%, over three months by +3.11% and over the past year by -28.91%.
Current recommended Stop Loss: 201.50 (which is 6.1% or 2.2 ATR below the current price).
Automatic Data Processing has received a consensus analysts rating of 3.28. Therefore, it is recommended to hold ADP.
- StrongBuy: 2
- Buy: 2
- Hold: 13
- Sell: 1
- StrongSell: 0
| Analysts Target Price | 246.8 | 15% |
P/E Trailing = 20.3741
P/E Forward = 17.9533
P/S = 4.0419
P/B = 13.7488
P/EG = 2.0411
Revenue TTM = 21.6b USD
EBIT TTM = 6.02b USD
EBITDA TTM = 6.51b USD
Long Term Debt = 3.98b USD (from longTermDebt, last quarter)
Short Term Debt = 4.77b USD (from shortTermDebt, last fiscal year)
Debt = 4.61b USD (from shortLongTermDebtTotal, last quarter) + Leases 318.2m
Net Debt = 1.39b USD (calculated: Debt 4.61b - CCE 3.23b)
Enterprise Value = 88.7b USD (87.3b + Debt 4.61b - CCE 3.23b)
Interest Coverage Ratio = 13.33 (Ebit TTM 6.02b / Interest Expense TTM 451.9m)
EV/FCF = 17.22x (Enterprise Value 88.7b / FCF TTM 5.15b)
FCF Yield = 5.81% (FCF TTM 5.15b / Enterprise Value 88.7b)
FCF Margin = 23.85% (FCF TTM 5.15b / Revenue TTM 21.6b)
Net Margin = 20.12% (Net Income TTM 4.35b / Revenue TTM 21.6b)
Gross Margin = 47.48% ((Revenue TTM 21.6b - Cost of Revenue TTM 11.3b) / Revenue TTM)
Gross Margin QoQ = 48.28% (prev 46.08%)
Tobins Q-Ratio = 1.38 (Enterprise Value 88.7b / Total Assets 64.5b)
Interest Expense / Debt = 9.79% (Interest Expense 451.9m / Debt 4.61b)
Taxrate = 23.27% (1.32b / 5.66b)
NOPAT = 4.62b (EBIT 6.02b * (1 - 23.27%))
Current Ratio = 1.04 (Total Current Assets 54.2b / Total Current Liabilities 52.0b)
Debt / Equity = 0.73 (Debt 4.61b / totalStockholderEquity, last quarter 6.35b)
Debt / EBITDA = 0.21 (Net Debt 1.39b / EBITDA 6.51b)
Debt / FCF = 0.27 (Net Debt 1.39b / FCF TTM 5.15b)
Total Stockholder Equity = 6.33b (last 4 quarters mean from totalStockholderEquity)
RoA = 7.19% (Net Income 4.35b / Total Assets 64.5b)
RoE = 68.69% (Net Income TTM 4.35b / Total Stockholder Equity 6.33b)
RoCE = 58.46% (EBIT 6.02b / Capital Employed (Equity 6.33b + L.T.Debt 3.98b))
RoIC = 28.61% (NOPAT 4.62b / Invested Capital 16.2b)
WACC = 6.67% (E(87.3b)/V(91.9b) * Re(6.63%) + D(4.61b)/V(91.9b) * Rd(9.79%) * (1-Tc(0.23)))
Discount Rate = 6.63% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: -100.00 | Cagr: -1.11%
[DCF] Terminal Value 77.81% ; FCFF base≈4.90b ; Y1≈5.57b ; Y5≈8.01b
[DCF] Fair Price = 298.7 (EV 121b - Net Debt 1.39b = Equity 119b / Shares 399.7m; r=8.35% [WACC [floored]]; 5y FCF grow 13.96% → 2.50% )
EPS Correlation: 99.59 | EPS CAGR: 9.88% | SUE: 2.07 | # QB: 9
Revenue Correlation: 99.99 | Revenue CAGR: 6.85% | SUE: 3.43 | # QB: 1
EPS next Quarter (2026-09-30): EPS=2.77 | Chg30d=+0.42% | Revisions=+29% | Analysts=13
EPS current Year (2026-06-30): EPS=11.07 | Chg30d=+0.06% | Revisions=+80% | GrowthEPS=+10.6% | GrowthRev=+6.2%
EPS next Year (2027-06-30): EPS=12.19 | Chg30d=+0.31% | Revisions=+81% | GrowthEPS=+10.1% | GrowthRev=+5.9%
[Analyst] Revisions Ratio: +81%