AUTOMATIC DATA PROCESSING (ADP) Fundamental Analysis & Valuation

NASDAQ:ADP • US0530151036

Current stock price

210.075 USD
+1.38 (+0.66%)
Last:

This ADP fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

9

1. ADP Profitability Analysis

1.1 Basic Checks

  • In the past year ADP was profitable.
  • ADP had a positive operating cash flow in the past year.
  • ADP had positive earnings in each of the past 5 years.
  • ADP had a positive operating cash flow in each of the past 5 years.
ADP Yearly Net Income VS EBIT VS OCF VS FCFADP Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B 4B 5B

1.2 Ratios

  • Looking at the Return On Assets, with a value of 5.00%, ADP is in the better half of the industry, outperforming 60.92% of the companies in the same industry.
  • With an excellent Return On Equity value of 66.25%, ADP belongs to the best of the industry, outperforming 95.40% of the companies in the same industry.
  • ADP has a Return On Invested Capital of 34.42%. This is amongst the best in the industry. ADP outperforms 97.70% of its industry peers.
  • The Average Return On Invested Capital over the past 3 years for ADP is significantly above the industry average of 12.57%.
Industry RankSector Rank
ROA 5%
ROE 66.25%
ROIC 34.42%
ROA(3y)7.08%
ROA(5y)6.25%
ROE(3y)81.89%
ROE(5y)76.59%
ROIC(3y)36.13%
ROIC(5y)33.86%
ADP Yearly ROA, ROE, ROICADP Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20 40 60 80

1.3 Margins

  • With an excellent Profit Margin value of 19.96%, ADP belongs to the best of the industry, outperforming 87.36% of the companies in the same industry.
  • ADP's Profit Margin has improved in the last couple of years.
  • The Operating Margin of ADP (26.37%) is better than 90.80% of its industry peers.
  • ADP's Operating Margin has improved in the last couple of years.
  • ADP has a better Gross Margin (46.16%) than 63.22% of its industry peers.
  • ADP's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 26.37%
PM (TTM) 19.96%
GM 46.16%
OM growth 3Y4.64%
OM growth 5Y4.17%
PM growth 3Y3.54%
PM growth 5Y3.25%
GM growth 3Y2.58%
GM growth 5Y1.81%
ADP Yearly Profit, Operating, Gross MarginsADP Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10 20 30 40

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5

2. ADP Health Analysis

2.1 Basic Checks

  • The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ADP is creating value.
  • Compared to 1 year ago, ADP has less shares outstanding
  • ADP has less shares outstanding than it did 5 years ago.
  • Compared to 1 year ago, ADP has a worse debt to assets ratio.
ADP Yearly Shares OutstandingADP Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 100M 200M 300M 400M
ADP Yearly Total Debt VS Total AssetsADP Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20B 40B 60B

2.2 Solvency

  • Based on the Altman-Z score of 1.58, we must say that ADP is in the distress zone and has some risk of bankruptcy.
  • ADP has a Altman-Z score of 1.58. This is in the lower half of the industry: ADP underperforms 60.92% of its industry peers.
  • The Debt to FCF ratio of ADP is 0.95, which is an excellent value as it means it would take ADP, only 0.95 years of fcf income to pay off all of its debts.
  • The Debt to FCF ratio of ADP (0.95) is better than 75.86% of its industry peers.
  • ADP has a Debt/Equity ratio of 0.62. This is a neutral value indicating ADP is somewhat dependend on debt financing.
  • ADP has a Debt to Equity ratio (0.62) which is in line with its industry peers.
  • Even though the debt/equity ratio score it not favorable for ADP, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
Industry RankSector Rank
Debt/Equity 0.62
Debt/FCF 0.95
Altman-Z 1.58
ROIC/WACC3.91
WACC8.81%
ADP Yearly LT Debt VS Equity VS FCFADP Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B

2.3 Liquidity

  • A Current Ratio of 1.03 indicates that ADP should not have too much problems paying its short term obligations.
  • Looking at the Current ratio, with a value of 1.03, ADP is doing worse than 75.86% of the companies in the same industry.
  • A Quick Ratio of 1.03 indicates that ADP should not have too much problems paying its short term obligations.
  • With a Quick ratio value of 1.03, ADP is not doing good in the industry: 75.86% of the companies in the same industry are doing better.
Industry RankSector Rank
Current Ratio 1.03
Quick Ratio 1.03
ADP Yearly Current Assets VS Current LiabilitesADP Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10B 20B 30B 40B 50B

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4

3. ADP Growth Analysis

3.1 Past

  • ADP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.08%, which is quite good.
  • ADP shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.05% yearly.
  • ADP shows a small growth in Revenue. In the last year, the Revenue has grown by 6.59%.
  • ADP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.10% yearly.
EPS 1Y (TTM)8.08%
EPS 3Y12.57%
EPS 5Y11.05%
EPS Q2Q%11.49%
Revenue 1Y (TTM)6.59%
Revenue growth 3Y7.61%
Revenue growth 5Y7.1%
Sales Q2Q%6.16%

3.2 Future

  • ADP is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.57% yearly.
  • The Revenue is expected to grow by 5.64% on average over the next years.
EPS Next Y10.77%
EPS Next 2Y9.93%
EPS Next 3Y9.36%
EPS Next 5Y7.57%
Revenue Next Year6.44%
Revenue Next 2Y6.06%
Revenue Next 3Y5.94%
Revenue Next 5Y5.64%

3.3 Evolution

  • When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
  • The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
ADP Yearly Revenue VS EstimatesADP Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 5B 10B 15B 20B 25B
ADP Yearly EPS VS EstimatesADP Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 5 10 15

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3

4. ADP Valuation Analysis

4.1 Price/Earnings Ratio

  • Based on the Price/Earnings ratio of 20.14, the valuation of ADP can be described as rather expensive.
  • Compared to the rest of the industry, the Price/Earnings ratio of ADP is on the same level as its industry peers.
  • Compared to an average S&P500 Price/Earnings ratio of 25.23, ADP is valued a bit cheaper.
  • ADP is valuated rather expensively with a Price/Forward Earnings ratio of 17.38.
  • The rest of the industry has a similar Price/Forward Earnings ratio as ADP.
  • When comparing the Price/Forward Earnings ratio of ADP to the average of the S&P500 Index (22.42), we can say ADP is valued slightly cheaper.
Industry RankSector Rank
PE 20.14
Fwd PE 17.38
ADP Price Earnings VS Forward Price EarningsADP Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

  • Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ADP is on the same level as its industry peers.
  • The rest of the industry has a similar Price/Free Cash Flow ratio as ADP.
Industry RankSector Rank
P/FCF 20.21
EV/EBITDA 13.84
ADP Per share dataADP EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30 40 50

4.3 Compensation for Growth

  • The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ADP does not grow enough to justify the current Price/Earnings ratio.
  • The excellent profitability rating of ADP may justify a higher PE ratio.
PEG (NY)1.87
PEG (5Y)1.82
EPS Next 2Y9.93%
EPS Next 3Y9.36%

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7

5. ADP Dividend Analysis

5.1 Amount

  • With a Yearly Dividend Yield of 3.23%, ADP has a reasonable but not impressive dividend return.
  • Compared to an average industry Dividend Yield of 1.79, ADP pays a better dividend. On top of this ADP pays more dividend than 86.21% of the companies listed in the same industry.
  • ADP's Dividend Yield is rather good when compared to the S&P500 average which is at 1.89.
Industry RankSector Rank
Dividend Yield 3.23%

5.2 History

  • On average, the dividend of ADP grows each year by 11.62%, which is quite nice.
  • ADP has paid a dividend for at least 10 years, which is a reliable track record.
  • ADP has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)11.62%
Div Incr Years26
Div Non Decr Years26
ADP Yearly Dividends per shareADP Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2 4 6

5.3 Sustainability

  • ADP pays out 59.26% of its income as dividend. This is a bit on the high side, but may be sustainable.
  • The dividend of ADP is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP59.26%
EPS Next 2Y9.93%
EPS Next 3Y9.36%
ADP Yearly Income VS Free CF VS DividendADP Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B 4B
ADP Dividend Payout.ADP Dividend Payout, showing the Payout Ratio.ADP Dividend Payout.PayoutRetained Earnings

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ADP Fundamentals: All Metrics, Ratios and Statistics

AUTOMATIC DATA PROCESSING

NASDAQ:ADP (3/23/2026, 9:51:06 AM)

210.075

+1.38 (+0.66%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)01-28
Earnings (Next)04-28
Inst Owners86.39%
Inst Owner Change2.11%
Ins Owners0.1%
Ins Owner Change0.8%
Market Cap84.58B
Revenue(TTM)21.21B
Net Income(TTM)4.24B
Analysts64.55
Price Target282.34 (34.4%)
Short Float %2.63%
Short Ratio3.16
Dividend
Industry RankSector Rank
Dividend Yield 3.23%
Yearly Dividend5.9
Dividend Growth(5Y)11.62%
DP59.26%
Div Incr Years26
Div Non Decr Years26
Ex-Date03-13
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)0.96%
Min EPS beat(2)0.82%
Max EPS beat(2)1.1%
EPS beat(4)4
Avg EPS beat(4)1.03%
Min EPS beat(4)0.35%
Max EPS beat(4)1.85%
EPS beat(8)8
Avg EPS beat(8)1.64%
EPS beat(12)12
Avg EPS beat(12)1.62%
EPS beat(16)16
Avg EPS beat(16)1.82%
Revenue beat(2)0
Avg Revenue beat(2)-0.41%
Min Revenue beat(2)-0.59%
Max Revenue beat(2)-0.23%
Revenue beat(4)2
Avg Revenue beat(4)-0.02%
Min Revenue beat(4)-0.59%
Max Revenue beat(4)0.64%
Revenue beat(8)4
Avg Revenue beat(8)-0.02%
Revenue beat(12)6
Avg Revenue beat(12)-0.08%
Revenue beat(16)9
Avg Revenue beat(16)-0.02%
PT rev (1m)-1.51%
PT rev (3m)-5.07%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.76%
EPS NY rev (1m)0.01%
EPS NY rev (3m)0.49%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.29%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.19%
Valuation
Industry RankSector Rank
PE 20.14
Fwd PE 17.38
P/S 3.99
P/FCF 20.21
P/OCF 17.84
P/B 13.23
P/tB 57.3
EV/EBITDA 13.84
EPS(TTM)10.43
EY4.96%
EPS(NY)12.08
Fwd EY5.75%
FCF(TTM)10.39
FCFY4.95%
OCF(TTM)11.77
OCFY5.6%
SpS52.69
BVpS15.88
TBVpS3.67
PEG (NY)1.87
PEG (5Y)1.82
Graham Number61.04
Profitability
Industry RankSector Rank
ROA 5%
ROE 66.25%
ROCE 44.75%
ROIC 34.42%
ROICexc 42.91%
ROICexgc 84.18%
OM 26.37%
PM (TTM) 19.96%
GM 46.16%
FCFM 19.73%
ROA(3y)7.08%
ROA(5y)6.25%
ROE(3y)81.89%
ROE(5y)76.59%
ROIC(3y)36.13%
ROIC(5y)33.86%
ROICexc(3y)55.75%
ROICexc(5y)48.87%
ROICexgc(3y)137.09%
ROICexgc(5y)114.46%
ROCE(3y)51.2%
ROCE(5y)46.57%
ROICexgc growth 3Y-1.22%
ROICexgc growth 5Y8.54%
ROICexc growth 3Y0.6%
ROICexc growth 5Y6.46%
OM growth 3Y4.64%
OM growth 5Y4.17%
PM growth 3Y3.54%
PM growth 5Y3.25%
GM growth 3Y2.58%
GM growth 5Y1.81%
F-Score6
Asset Turnover0.25
Health
Industry RankSector Rank
Debt/Equity 0.62
Debt/FCF 0.95
Debt/EBITDA 0.64
Cap/Depr 94.94%
Cap/Sales 2.62%
Interest Coverage 12.97
Cash Conversion 76.72%
Profit Quality 98.81%
Current Ratio 1.03
Quick Ratio 1.03
Altman-Z 1.58
F-Score6
WACC8.81%
ROIC/WACC3.91
Cap/Depr(3y)99.42%
Cap/Depr(5y)100.95%
Cap/Sales(3y)2.92%
Cap/Sales(5y)3.1%
Profit Quality(3y)103.34%
Profit Quality(5y)99.19%
High Growth Momentum
Growth
EPS 1Y (TTM)8.08%
EPS 3Y12.57%
EPS 5Y11.05%
EPS Q2Q%11.49%
EPS Next Y10.77%
EPS Next 2Y9.93%
EPS Next 3Y9.36%
EPS Next 5Y7.57%
Revenue 1Y (TTM)6.59%
Revenue growth 3Y7.61%
Revenue growth 5Y7.1%
Sales Q2Q%6.16%
Revenue Next Year6.44%
Revenue Next 2Y6.06%
Revenue Next 3Y5.94%
Revenue Next 5Y5.64%
EBIT growth 1Y6.33%
EBIT growth 3Y12.61%
EBIT growth 5Y11.57%
EBIT Next Year19.16%
EBIT Next 3Y11.05%
EBIT Next 5Y10.37%
FCF growth 1Y23.42%
FCF growth 3Y19.94%
FCF growth 5Y12.76%
OCF growth 1Y20.04%
OCF growth 3Y16.81%
OCF growth 5Y10.3%

AUTOMATIC DATA PROCESSING / ADP Fundamental Analysis FAQ

Can you provide the ChartMill fundamental rating for AUTOMATIC DATA PROCESSING?

ChartMill assigns a fundamental rating of 6 / 10 to ADP.


What is the valuation status for ADP stock?

ChartMill assigns a valuation rating of 3 / 10 to AUTOMATIC DATA PROCESSING (ADP). This can be considered as Overvalued.


What is the profitability of ADP stock?

AUTOMATIC DATA PROCESSING (ADP) has a profitability rating of 9 / 10.


Can you provide the expected EPS growth for ADP stock?

The Earnings per Share (EPS) of AUTOMATIC DATA PROCESSING (ADP) is expected to grow by 10.77% in the next year.


Is the dividend of AUTOMATIC DATA PROCESSING sustainable?

The dividend rating of AUTOMATIC DATA PROCESSING (ADP) is 7 / 10 and the dividend payout ratio is 59.26%.