AUTOMATIC DATA PROCESSING (ADP) Fundamental Analysis & Valuation

NASDAQ:ADP • US0530151036

Current stock price

208.28 USD
-1.45 (-0.69%)
At close:
209.25 USD
+0.97 (+0.47%)
Pre-Market:

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

  • ADP had positive earnings in the past year.
  • ADP had a positive operating cash flow in the past year.
  • ADP had positive earnings in each of the past 5 years.
  • Each year in the past 5 years ADP had a positive operating cash flow.
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 Return On Assets of 5.00%. This is in the better half of the industry: ADP outperforms 60.92% of its industry peers.
  • Looking at the Return On Equity, with a value of 66.25%, ADP belongs to the top of the industry, outperforming 95.40% of the companies in the same industry.
  • The Return On Invested Capital of ADP (34.42%) is better than 97.70% of its industry peers.
  • Measured over the past 3 years, the Average Return On Invested Capital 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

  • ADP has a better Profit Margin (19.96%) than 87.36% of its industry peers.
  • 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.
  • In the last couple of years the Operating Margin of ADP has grown nicely.
  • Looking at the Gross Margin, with a value of 46.16%, ADP is in the better half of the industry, outperforming 64.37% of the companies in the same industry.
  • 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
  • The number of shares outstanding for ADP has been reduced compared to 5 years ago.
  • The debt/assets ratio for ADP is higher compared to a year ago.
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 1.57, we must say that ADP is in the distress zone and has some risk of bankruptcy.
  • Looking at the Altman-Z score, with a value of 1.57, ADP is doing worse than 60.92% of the companies in the same industry.
  • ADP has a debt to FCF ratio of 0.95. This is a very positive value and a sign of high solvency as it would only need 0.95 years to pay back of all of its debts.
  • Looking at the Debt to FCF ratio, with a value of 0.95, ADP is in the better half of the industry, outperforming 75.86% of the companies in the same industry.
  • A Debt/Equity ratio of 0.62 indicates that ADP is somewhat dependend on debt financing.
  • Looking at the Debt to Equity ratio, with a value of 0.62, ADP is in line with its industry, outperforming 41.38% of the companies in the same industry.
  • Although ADP's pure debt/equity ratio does not look good, it has limited outstanding debt compared to the Free Cash Flow. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
Industry RankSector Rank
Debt/Equity 0.62
Debt/FCF 0.95
Altman-Z 1.57
ROIC/WACC3.99
WACC8.63%
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 75.86% of its industry peers.
  • ADP has a Quick 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.
  • 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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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 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

  • Based on estimates for the next years, ADP will show a small growth in Earnings Per Share. The EPS will grow by 7.57% on average per year.
  • 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 2Y6.08%
Revenue Next 3Y6%
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

  • With a Price/Earnings ratio of 19.97, ADP is valued on the expensive side.
  • The rest of the industry has a similar Price/Earnings ratio as ADP.
  • ADP is valuated rather cheaply when we compare the Price/Earnings ratio to 25.79, which is the current average of the S&P500 Index.
  • The Price/Forward Earnings ratio is 17.24, which indicates a rather expensive current valuation of ADP.
  • ADP's Price/Forward Earnings is on the same level as the industry average.
  • ADP's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.80.
Industry RankSector Rank
PE 19.97
Fwd PE 17.24
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

  • ADP's Enterprise Value to EBITDA is on the same level as the industry average.
  • ADP's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 20.04
EV/EBITDA 13.81
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 an expensive valuation of the company.
  • The excellent profitability rating of ADP may justify a higher PE ratio.
PEG (NY)1.85
PEG (5Y)1.81
EPS Next 2Y9.93%
EPS Next 3Y9.36%

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7

5. ADP Dividend Analysis

5.1 Amount

  • ADP has a Yearly Dividend Yield of 3.28%. Purely for dividend investing, there may be better candidates out there.
  • Compared to an average industry Dividend Yield of 1.71, ADP pays a better dividend. On top of this ADP pays more dividend than 86.21% of the companies listed in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.91, ADP pays a better dividend.
Industry RankSector Rank
Dividend Yield 3.28%

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 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

  • 59.26% of the earnings are spent on dividend by ADP. 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 (3/18/2026, 8:00:00 PM)

Premarket: 209.25 +0.97 (+0.47%)

208.28

-1.45 (-0.69%)

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 Change2.1%
Ins Owners0.1%
Ins Owner Change0.84%
Market Cap83.86B
Revenue(TTM)21.21B
Net Income(TTM)4.24B
Analysts64.55
Price Target282.34 (35.56%)
Short Float %2.63%
Short Ratio3.16
Dividend
Industry RankSector Rank
Dividend Yield 3.28%
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)0.01%
Revenue NY rev (3m)0.19%
Valuation
Industry RankSector Rank
PE 19.97
Fwd PE 17.24
P/S 3.95
P/FCF 20.04
P/OCF 17.69
P/B 13.12
P/tB 56.81
EV/EBITDA 13.81
EPS(TTM)10.43
EY5.01%
EPS(NY)12.08
Fwd EY5.8%
FCF(TTM)10.39
FCFY4.99%
OCF(TTM)11.77
OCFY5.65%
SpS52.69
BVpS15.88
TBVpS3.67
PEG (NY)1.85
PEG (5Y)1.81
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 1.57
F-Score6
WACC8.63%
ROIC/WACC3.99
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 2Y6.08%
Revenue Next 3Y6%
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%.