AUTOMATIC DATA PROCESSING (ADP) Fundamental Analysis & Valuation

NASDAQ:ADP • US0530151036

Current stock price

211.94 USD
-3.12 (-1.45%)
At close:
213.03 USD
+1.09 (+0.51%)
After Hours:

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.
  • In the past year ADP had a positive cash flow from operations.
  • Each year in the past 5 years ADP has been profitable.
  • 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

  • ADP has a better Return On Assets (5.00%) than 62.35% of its industry peers.
  • ADP has a better Return On Equity (66.25%) than 95.29% of its industry peers.
  • With an excellent Return On Invested Capital value of 34.42%, ADP belongs to the best of the industry, outperforming 97.65% of the companies in the same industry.
  • The Average Return On Invested Capital over the past 3 years for ADP is significantly above the industry average of 12.34%.
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

  • ADP has a Profit Margin of 19.96%. This is amongst the best in the industry. ADP outperforms 85.88% of its industry peers.
  • In the last couple of years the Profit Margin of ADP has grown nicely.
  • The Operating Margin of ADP (26.37%) is better than 89.41% of its industry peers.
  • ADP's Operating Margin has improved in the last couple of years.
  • ADP's Gross Margin of 46.16% is fine compared to the rest of the industry. ADP outperforms 64.71% 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

  • With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ADP is creating value.
  • The number of shares outstanding for ADP has been reduced compared to 1 year ago.
  • The number of shares outstanding for ADP has been reduced compared to 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 1.59, we must say that ADP is in the distress zone and has some risk of bankruptcy.
  • With a Altman-Z score value of 1.59, ADP is not doing good in the industry: 65.88% of the companies in the same industry are doing better.
  • 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 76.47% of its industry peers.
  • A Debt/Equity ratio of 0.62 indicates that ADP is somewhat dependend on debt financing.
  • With a Debt to Equity ratio value of 0.62, ADP is not doing good in the industry: 63.53% of the companies in the same industry are doing better.
  • 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 1.59
ROIC/WACC3.89
WACC8.84%
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

  • ADP has a Current Ratio of 1.03. This is a normal value and indicates that ADP is financially healthy and should not expect problems in meeting its short term obligations.
  • The Current ratio of ADP (1.03) is worse than 77.65% of its industry peers.
  • A Quick Ratio of 1.03 indicates that ADP should not have too much problems paying its short term obligations.
  • The Quick ratio of ADP (1.03) is worse than 77.65% of its industry peers.
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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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

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 9.26%, which is quite good.
  • The Earnings Per Share has been growing by 11.05% on average over the past years. This is quite good.
  • Looking at the last year, ADP shows a small growth in Revenue. The Revenue has grown by 7.07% in the last year.
  • The Revenue has been growing slightly by 7.10% on average over the past years.
EPS 1Y (TTM)9.26%
EPS 3Y12.57%
EPS 5Y11.05%
EPS Q2Q%10.13%
Revenue 1Y (TTM)7.07%
Revenue growth 3Y7.61%
Revenue growth 5Y7.1%
Sales Q2Q%6.95%

3.2 Future

  • Based on estimates for the next years, ADP will show a small growth in Earnings Per Share. The EPS will grow by 6.79% on average per year.
  • The Revenue is expected to grow by 4.46% on average over the next years.
EPS Next Y10.77%
EPS Next 2Y9.93%
EPS Next 3Y9.38%
EPS Next 5Y6.79%
Revenue Next Year6.44%
Revenue Next 2Y6.06%
Revenue Next 3Y5.96%
Revenue Next 5Y4.46%

3.3 Evolution

  • The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
  • 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

  • With a Price/Earnings ratio of 19.73, ADP is valued on the expensive side.
  • ADP's Price/Earnings ratio is in line with the industry average.
  • When comparing the Price/Earnings ratio of ADP to the average of the S&P500 Index (26.77), we can say ADP is valued slightly cheaper.
  • ADP is valuated rather expensively with a Price/Forward Earnings ratio of 17.54.
  • ADP's Price/Forward Earnings is on the same level as the industry average.
  • When comparing the Price/Forward Earnings ratio of ADP to the average of the S&P500 Index (21.75), we can say ADP is valued inline with the index average.
Industry RankSector Rank
PE 19.73
Fwd PE 17.54
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

  • The rest of the industry has a similar Enterprise Value to EBITDA ratio as ADP.
  • ADP's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 20.39
EV/EBITDA 14.05
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)1.83
PEG (5Y)1.79
EPS Next 2Y9.93%
EPS Next 3Y9.38%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

7

5. ADP Dividend Analysis

5.1 Amount

  • ADP has a Yearly Dividend Yield of 3.16%. Purely for dividend investing, there may be better candidates out there.
  • Compared to an average industry Dividend Yield of 1.74, ADP pays a better dividend. On top of this ADP pays more dividend than 85.88% 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 1.82.
Industry RankSector Rank
Dividend Yield 3.16%

5.2 History

  • On average, the dividend of ADP grows each year by 11.62%, which is quite nice.
  • ADP has been paying a dividend for at least 10 years, so it has 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 Years27
Div Non Decr Years27
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.
  • ADP's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP59.26%
EPS Next 2Y9.93%
EPS Next 3Y9.38%
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 (4/30/2026, 8:00:00 PM)

After market: 213.03 +1.09 (+0.51%)

211.94

-3.12 (-1.45%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Industry Strength14.91
Industry Growth34.16
Earnings (Last)04-29
Earnings (Next)07-28
Inst Owners86.43%
Inst Owner Change-0.8%
Ins Owners0.1%
Ins Owner Change0.76%
Market Cap85.34B
Revenue(TTM)20.56B
Net Income(TTM)4.24B
Analysts66.09
Price Target265.01 (25.04%)
Short Float %3.49%
Short Ratio3.75
Dividend
Industry RankSector Rank
Dividend Yield 3.16%
Yearly Dividend5.9
Dividend Growth(5Y)11.62%
DP59.26%
Div Incr Years27
Div Non Decr Years27
Ex-Date06-12
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)-4.28%
PT rev (3m)-8.77%
EPS NQ rev (1m)-0.02%
EPS NQ rev (3m)0.55%
EPS NY rev (1m)0%
EPS NY rev (3m)0.49%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.27%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.19%
Valuation
Industry RankSector Rank
PE 19.73
Fwd PE 17.54
P/S 4.02
P/FCF 20.39
P/OCF 18
P/B 13.35
P/tB 57.8
EV/EBITDA 14.05
EPS(TTM)10.74
EY5.07%
EPS(NY)12.09
Fwd EY5.7%
FCF(TTM)10.39
FCFY4.9%
OCF(TTM)11.77
OCFY5.55%
SpS52.69
BVpS15.88
TBVpS3.67
PEG (NY)1.83
PEG (5Y)1.79
Graham Number61.9423 (-70.77%)
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 1.59
F-Score6
WACC8.84%
ROIC/WACC3.89
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)9.26%
EPS 3Y12.57%
EPS 5Y11.05%
EPS Q2Q%10.13%
EPS Next Y10.77%
EPS Next 2Y9.93%
EPS Next 3Y9.38%
EPS Next 5Y6.79%
Revenue 1Y (TTM)7.07%
Revenue growth 3Y7.61%
Revenue growth 5Y7.1%
Sales Q2Q%6.95%
Revenue Next Year6.44%
Revenue Next 2Y6.06%
Revenue Next 3Y5.96%
Revenue Next 5Y4.46%
EBIT growth 1Y6.33%
EBIT growth 3Y12.61%
EBIT growth 5Y11.57%
EBIT Next Year19.16%
EBIT Next 3Y11.09%
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.


How profitable is AUTOMATIC DATA PROCESSING (ADP) stock?

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


What are the PE and PB ratios of AUTOMATIC DATA PROCESSING (ADP) stock?

The Price/Earnings (PE) ratio for AUTOMATIC DATA PROCESSING (ADP) is 19.73 and the Price/Book (PB) ratio is 13.35.


How sustainable is the dividend of AUTOMATIC DATA PROCESSING (ADP) stock?

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