AUTOMATIC DATA PROCESSING (ADP.DE) Stock Fundamental Analysis
Europe • Frankfurt Stock Exchange • FRA:ADP • US0530151036
209.35 EUR
+2.7 (+1.31%)
Last: Feb 2, 2026, 07:00 PM
ADP gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 34 industry peers in the Professional Services industry. ADP scores excellent on profitability, but there are some minor concerns on its financial health. ADP is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
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.
- ADP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of ADP (5.00%) is better than 64.71% 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 88.24% of the companies in the same industry.
- ADP's Return On Invested Capital of 34.42% is amongst the best of the industry. ADP outperforms 100.00% 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 11.75%.
| Industry Rank | Sector 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%
1.3 Margins
- ADP has a better Profit Margin (19.96%) than 91.18% of its industry peers.
- ADP's Profit Margin has improved in the last couple of years.
- Looking at the Operating Margin, with a value of 26.37%, ADP belongs to the top of the industry, outperforming 91.18% of the companies in the same industry.
- ADP's Operating Margin has improved in the last couple of years.
- ADP has a Gross Margin (46.16%) which is in line with its industry peers.
- ADP's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector 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%
2. Health
2.1 Basic Checks
- ADP has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- The number of shares outstanding for ADP has been reduced compared to 1 year ago.
- Compared to 5 years ago, ADP has less shares outstanding
- The debt/assets ratio for ADP is higher compared to a year ago.
2.2 Solvency
- ADP has an Altman-Z score of 1.70. This is a bad value and indicates that ADP is not financially healthy and even has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 1.70, ADP is doing worse than 73.53% of the companies in the same industry.
- 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.
- ADP has a Debt to FCF ratio of 0.95. This is amongst the best in the industry. ADP outperforms 97.06% 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 comparable to the rest of the industry.
- Although ADP does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. 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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 0.95 | ||
| Altman-Z | 1.7 |
ROIC/WACC3.96
WACC8.69%
2.3 Liquidity
- A Current Ratio of 1.03 indicates that ADP should not have too much problems paying its short term obligations.
- ADP has a Current ratio of 1.03. This is comparable to the rest of the industry: ADP outperforms 44.12% 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 comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.03 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 8.08% over the past year.
- Measured over the past years, ADP shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.05% on average per year.
- Looking at the last year, ADP shows a small growth in Revenue. The Revenue has grown by 6.59% in the last year.
- Measured over the past years, ADP shows a small growth in Revenue. The Revenue has been growing by 7.10% on average per year.
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 7.91% yearly.
- ADP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.68% yearly.
EPS Next Y10.23%
EPS Next 2Y9.75%
EPS Next 3Y9.56%
EPS Next 5Y7.91%
Revenue Next Year6.24%
Revenue Next 2Y6.01%
Revenue Next 3Y5.97%
Revenue Next 5Y5.68%
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.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 23.76, ADP is valued on the expensive side.
- 67.65% of the companies in the same industry are more expensive than ADP, based on the Price/Earnings ratio.
- ADP is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.41, which is the current average of the S&P500 Index.
- ADP is valuated rather expensively with a Price/Forward Earnings ratio of 20.58.
- ADP's Price/Forward Earnings ratio is in line with the industry average.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.64, ADP is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.76 | ||
| Fwd PE | 20.58 |
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 Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.96 | ||
| EV/EBITDA | 16.46 |
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.
- ADP has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.32
PEG (5Y)2.15
EPS Next 2Y9.75%
EPS Next 3Y9.56%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.76%, ADP has a reasonable but not impressive dividend return.
- ADP's Dividend Yield is a higher than the industry average which is at 2.44.
- ADP's Dividend Yield is rather good when compared to the S&P500 average which is at 1.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.76% |
5.2 History
- The dividend of ADP is nicely growing with an annual growth rate of 11.62%!
Dividend Growth(5Y)11.62%
Div Incr Years2
Div Non Decr Years2
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 2Y9.75%
EPS Next 3Y9.56%
FRA:ADP (2/2/2026, 7:00:00 PM)
209.35
+2.7 (+1.31%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)01-28 2026-01-28/bmo
Earnings (Next)04-28 2026-04-28/bmo
Inst Owners86.82%
Inst Owner ChangeN/A
Ins Owners0.1%
Ins Owner ChangeN/A
Market Cap84.67B
Revenue(TTM)21.21B
Net Income(TTM)4.24B
Analysts55
Price Target259.83 (24.11%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.76% |
Yearly Dividend4.95
Dividend Growth(5Y)11.62%
DP59.26%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
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)1.84%
PT rev (3m)-4.65%
EPS NQ rev (1m)0.17%
EPS NQ rev (3m)-0.29%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.05%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)-0.12%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.76 | ||
| Fwd PE | 20.58 | ||
| P/S | 4.73 | ||
| P/FCF | 23.96 | ||
| P/OCF | 21.15 | ||
| P/B | 15.68 | ||
| P/tB | 67.91 | ||
| EV/EBITDA | 16.46 |
EPS(TTM)8.81
EY4.21%
EPS(NY)10.17
Fwd EY4.86%
FCF(TTM)8.74
FCFY4.17%
OCF(TTM)9.9
OCFY4.73%
SpS44.3
BVpS13.35
TBVpS3.08
PEG (NY)2.32
PEG (5Y)2.15
Graham Number51.44
Profitability
| Industry Rank | Sector 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 Rank | Sector 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 | 1.7 |
F-Score6
WACC8.69%
ROIC/WACC3.96
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 Y10.23%
EPS Next 2Y9.75%
EPS Next 3Y9.56%
EPS Next 5Y7.91%
Revenue 1Y (TTM)6.59%
Revenue growth 3Y7.61%
Revenue growth 5Y7.1%
Sales Q2Q%6.16%
Revenue Next Year6.24%
Revenue Next 2Y6.01%
Revenue Next 3Y5.97%
Revenue Next 5Y5.68%
EBIT growth 1Y6.33%
EBIT growth 3Y12.61%
EBIT growth 5Y11.57%
EBIT Next Year18.65%
EBIT Next 3Y11.07%
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.DE FAQ
Can you provide the ChartMill fundamental rating for AUTOMATIC DATA PROCESSING?
ChartMill assigns a fundamental rating of 6 / 10 to ADP.DE.
What is the valuation status for ADP stock?
ChartMill assigns a valuation rating of 3 / 10 to AUTOMATIC DATA PROCESSING (ADP.DE). This can be considered as Overvalued.
What is the profitability of ADP stock?
AUTOMATIC DATA PROCESSING (ADP.DE) has a profitability rating of 8 / 10.
Can you provide the expected EPS growth for ADP stock?
The Earnings per Share (EPS) of AUTOMATIC DATA PROCESSING (ADP.DE) is expected to grow by 10.23% in the next year.
Is the dividend of AUTOMATIC DATA PROCESSING sustainable?
The dividend rating of AUTOMATIC DATA PROCESSING (ADP.DE) is 6 / 10 and the dividend payout ratio is 59.26%.