ADP (ADP.PA) Stock Fundamental Analysis
Europe - Euronext Paris - EPA:ADP - FR0010340141 - Common Stock
110.1 EUR
+0.7 (+0.64%)
Overall ADP gets a fundamental rating of 3 out of 10. We evaluated ADP against 14 industry peers in the Transportation Infrastructure industry. ADP may be in some trouble as it scores bad on both profitability and health. ADP has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
- ADP had positive earnings in the past year.
- In the past year ADP had a positive cash flow from operations.
- The reported net income has been mixed in the past 5 years: ADP reported negative net income in multiple years.
- Each year in the past 5 years ADP had a positive operating cash flow.
1.2 Ratios
- ADP has a Return On Assets of 0.46%. This is in the lower half of the industry: ADP underperforms 64.29% of its industry peers.
- ADP has a worse Return On Equity (2.29%) than 64.29% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 4.78%, ADP is in line with its industry, outperforming 42.86% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for ADP is below the industry average of 8.18%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.46% | ||
| ROE | 2.29% | ||
| ROIC | 4.78% |
ROA(3y)2.55%
ROA(5y)0%
ROE(3y)11.68%
ROE(5y)-0.81%
ROIC(3y)5.03%
ROIC(5y)N/A
1.3 Margins
- ADP's Profit Margin of 1.45% is in line compared to the rest of the industry. ADP outperforms 42.86% of its industry peers.
- In the last couple of years the Profit Margin of ADP has declined.
- With a Operating Margin value of 17.92%, ADP perfoms like the industry average, outperforming 57.14% of the companies in the same industry.
- In the last couple of years the Operating Margin of ADP has remained more or less at the same level.
- Looking at the Gross Margin, with a value of 85.41%, ADP is in the better half of the industry, outperforming 64.29% of the companies in the same industry.
- ADP's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.92% | ||
| PM (TTM) | 1.45% | ||
| GM | 85.41% |
OM growth 3Y141.84%
OM growth 5Y-0.19%
PM growth 3YN/A
PM growth 5Y-14.99%
GM growth 3Y-0.45%
GM growth 5Y-0.89%
2. Health
2.1 Basic Checks
- ADP has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- Compared to 1 year ago, ADP has about the same amount of shares outstanding.
- Compared to 5 years ago, ADP has less shares outstanding
- Compared to 1 year ago, ADP has a worse debt to assets ratio.
2.2 Solvency
- ADP has an Altman-Z score of 1.20. This is a bad value and indicates that ADP is not financially healthy and even has some risk of bankruptcy.
- ADP has a Altman-Z score of 1.20. This is in the lower half of the industry: ADP underperforms 64.29% of its industry peers.
- ADP has a debt to FCF ratio of 17.81. This is a negative value and a sign of low solvency as ADP would need 17.81 years to pay back of all of its debts.
- ADP has a Debt to FCF ratio of 17.81. This is comparable to the rest of the industry: ADP outperforms 50.00% of its industry peers.
- ADP has a Debt/Equity ratio of 2.32. This is a high value indicating a heavy dependency on external financing.
- ADP's Debt to Equity ratio of 2.32 is on the low side compared to the rest of the industry. ADP is outperformed by 64.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.32 | ||
| Debt/FCF | 17.81 | ||
| Altman-Z | 1.2 |
ROIC/WACC0.9
WACC5.31%
2.3 Liquidity
- ADP has a Current Ratio of 1.12. This is a normal value and indicates that ADP is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Current ratio, with a value of 1.12, ADP is in line with its industry, outperforming 42.86% of the companies in the same industry.
- ADP has a Quick Ratio of 1.08. This is a normal value and indicates that ADP is financially healthy and should not expect problems in meeting its short term obligations.
- ADP has a Quick ratio (1.08) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.08 |
3. Growth
3.1 Past
- The earnings per share for ADP have decreased strongly by -74.00% in the last year.
- The earnings per share for ADP have been decreasing by -10.33% on average. This is quite bad
- The Revenue has grown by 10.23% in the past year. This is quite good.
- The Revenue has been growing slightly by 5.55% on average over the past years.
EPS 1Y (TTM)-74%
EPS 3YN/A
EPS 5Y-10.33%
EPS Q2Q%-40.63%
Revenue 1Y (TTM)10.23%
Revenue growth 3Y30.4%
Revenue growth 5Y5.55%
Sales Q2Q%9.56%
3.2 Future
- Based on estimates for the next years, ADP will show a very strong growth in Earnings Per Share. The EPS will grow by 20.25% on average per year.
- ADP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.74% yearly.
EPS Next Y43.66%
EPS Next 2Y39.62%
EPS Next 3Y31.73%
EPS Next 5Y20.25%
Revenue Next Year10.58%
Revenue Next 2Y7.55%
Revenue Next 3Y6.38%
Revenue Next 5Y5.74%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 54.50, which means the current valuation is very expensive for ADP.
- Compared to the rest of the industry, the Price/Earnings ratio of ADP indicates a slightly more expensive valuation: ADP is more expensive than 64.29% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 28.87, ADP is valued quite expensively.
- Based on the Price/Forward Earnings ratio of 16.37, the valuation of ADP can be described as correct.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of ADP indicates a somewhat cheap valuation: ADP is cheaper than 71.43% of the companies listed in the same industry.
- ADP's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.96.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.5 | ||
| Fwd PE | 16.37 |
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 is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.63 | ||
| EV/EBITDA | 8.92 |
4.3 Compensation for Growth
- ADP's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- A more expensive valuation may be justified as ADP's earnings are expected to grow with 31.73% in the coming years.
PEG (NY)1.25
PEG (5Y)N/A
EPS Next 2Y39.62%
EPS Next 3Y31.73%
5. Dividend
5.1 Amount
- ADP has a Yearly Dividend Yield of 2.70%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 4.85, ADP has a dividend in line with its industry peers.
- ADP's Dividend Yield is a higher than the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.7% |
5.2 History
- The dividend of ADP is nicely growing with an annual growth rate of 7.94%!
Dividend Growth(5Y)7.94%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
- ADP pays out 318.28% of its income as dividend. This is not a sustainable payout ratio.
- The dividend of ADP is growing, but earnings are growing more, so the dividend growth is sustainable.
DP318.28%
EPS Next 2Y39.62%
EPS Next 3Y31.73%
ADP / ADP.PA FAQ
Can you provide the ChartMill fundamental rating for ADP?
ChartMill assigns a fundamental rating of 3 / 10 to ADP.PA.
What is the valuation status for ADP stock?
ChartMill assigns a valuation rating of 4 / 10 to ADP (ADP.PA). This can be considered as Fairly Valued.
What is the profitability of ADP stock?
ADP (ADP.PA) has a profitability rating of 3 / 10.
Can you provide the expected EPS growth for ADP stock?
The Earnings per Share (EPS) of ADP (ADP.PA) is expected to grow by 43.66% in the next year.
Is the dividend of ADP sustainable?
The dividend rating of ADP (ADP.PA) is 4 / 10 and the dividend payout ratio is 318.28%.