ADP

Automatic Data Processing, Inc.

Fundamental data last updated:May 12, 2026

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company profile

SECTOR

Industrials

industry

Staffing & Employment Services

Exchange

NASDAQ

County of HQ

United States

Next Earnings Date

07/29/2026

Business Summary

ADP's business model revolves around providing comprehensive payroll and HR solutions, generating consistent cash flow through subscription-based services. The company's competitive moat is fortified by its extensive client base and integrated technology platforms, which create high switching costs for customers. By continuously innovating and expanding its service offerings, ADP locks in clients and maintains a dominant market position. This strategic approach ensures long-term revenue stability and growth.

 


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VALUATION

P/E

19.55

Market Cap ($M USD)

$84.68B

Forward P/E

15.90

PEG

0.69

PRICE TO SALES

3.92

PRICE TO BOOK

13.38

EV / EBITDA

13.12

5-Year Average P/E

Free Cash Flow Yield

6.08%

DCF Value

$376.32

Graham Number

$62.12

Price to FCF

16.44

EV to FCF

16.58

Earnings Yield

5.11%

FCF Yield

6.08%

DIVIDEND

Yield

3.06%

Annual Payout

$6.48

Payout Ratio

59.12%

Consecutive Years of Dividend Growth

5-Year Dividend Growth Rate

Financial Health & Profitability

Earnings Per Share

$10.83

Next Year EPS Growth Estimate

$13.33

Next Year Revenue Growth Estimate

$2.45T

Return on Equity (ROE)

68.69%

FREE CASH FLOW

Operating Margin

19.20%

Debt-to-Equity

1.46

Piotroski F-Score

6

Altman Z-Score

2.14

Return on Invested Capital (ROIC)

33.27%

Current Ratio

1.04

Quick Ratio

1.04

Net Debt to EBITDA

0.11

Interest Coverage

9.18

Gross Profit margin

47.48%

FCF PER SHARE

$12.84

REVENUE PER SHARE

$53.85

Analyze ADP on TradingView

Gainseekers Quantitative Analysis

Summary

ADP’s current valuation presents a compelling opportunity for discerning investors. The stock has traded below its DCF value, suggesting a significant mispricing by the market. With a Forward P/E of 15.90 and an Earnings Yield of 5.11%, the company appears attractively valued relative to its earnings potential. However, the Altman Z-score of 2.14 indicates moderate financial distress, warranting caution. Despite this, the robust Return on Equity of 68.69% underscores strong management execution and profitability.

AI Exposure / Tech Reliance

Operating within the staffing and employment services industry, ADP is well-positioned to leverage AI and technological advancements. The company's focus on automating payroll and HR services aligns with modern tech trends, enhancing efficiency and client satisfaction. This adaptability ensures resilience in an evolving digital landscape.

The Bull Case

For GARP investors, ADP offers a tantalizing mix of growth and value. The impressive ROIC of 33.27% highlights exceptional capital efficiency, while a Piotroski F-Score of 6 suggests solid financial health. With a Free Cash Flow Yield of 6.08% and a strong operating margin of 19.20%, the company demonstrates robust pricing power and operational effectiveness. These metrics collectively paint a picture of a company capable of delivering sustained shareholder value.

The Bear Case

Despite its strengths, ADP's high Price/Book ratio of 13.38 and Price/Sales ratio of 3.92 raise red flags about its valuation. These multiples suggest the stock may be overvalued relative to its book and sales figures. Additionally, the stock's proximity to its 52-week high, with a distance of 55.74%, indicates potential technical overextension. Investors should be wary of these structural risks, which could limit upside potential.

Market Sentiment & Smart Money

Short Interest %

Analyst Consensus

Hold

Average Analyst Price Target

$243.63

Institutional Ownership %

1-Year Beta

0.84

Insider Buying % (6 Mo)

Distance to 52-Week High

55.74%

Distance to 52-Week Low

11.18%

EARNINGS SURPRISE %

2.12%

50-DAY SMA

$206.83

200-DAY SMA

$254.49

⚠️ Financial Disclaimer:
This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate. We may earn a commission from partner links.