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AUTOMATIC DATA PROCESSING (ADP) Stock Fundamental Analysis

NASDAQ:ADP - US0530151036 - Common Stock

307.95 USD
+3.01 (+0.99%)
Last: 8/22/2025, 8:00:00 PM
307.95 USD
0 (0%)
After Hours: 8/22/2025, 8:00:00 PM
Fundamental Rating

6

Taking everything into account, ADP scores 6 out of 10 in our fundamental rating. ADP was compared to 81 industry peers in the Professional Services industry. ADP has an excellent profitability rating, but there are some minor concerns on its financial health. While showing a medium growth rate, ADP is valued expensive at the moment.


Dividend Valuation Growth Profitability Health

9

1. Profitability

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 2015 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 7.64%, ADP is in the better half of the industry, outperforming 77.78% of the companies in the same industry.
ADP's Return On Equity of 65.93% is amongst the best of the industry. ADP outperforms 93.83% of its industry peers.
With an excellent Return On Invested Capital value of 24.78%, ADP belongs to the best of the industry, outperforming 95.06% of the companies in the same industry.
ADP had an Average Return On Invested Capital over the past 3 years of 36.13%. This is significantly above the industry average of 12.50%.
The last Return On Invested Capital (24.78%) for ADP is well below the 3 year average (36.13%), which needs to be investigated, but indicates that ADP had better years and this may not be a problem.
Industry RankSector Rank
ROA 7.64%
ROE 65.93%
ROIC 24.78%
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 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20 40 60 80

1.3 Margins

ADP's Profit Margin of 19.84% is amongst the best of the industry. ADP outperforms 91.36% of its industry peers.
In the last couple of years the Profit Margin of ADP has grown nicely.
Looking at the Operating Margin, with a value of 26.42%, ADP belongs to the top of the industry, outperforming 91.36% of the companies in the same industry.
In the last couple of years the Operating Margin of ADP has grown nicely.
ADP's Gross Margin of 47.37% is fine compared to the rest of the industry. ADP outperforms 60.49% of its industry peers.
In the last couple of years the Gross Margin of ADP has grown nicely.
Industry RankSector Rank
OM 26.42%
PM (TTM) 19.84%
GM 47.37%
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 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10 20 30 40

6

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.
Compared to 1 year ago, ADP has less shares outstanding
ADP has less shares outstanding than it did 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 2015 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 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20B 40B 60B

2.2 Solvency

An Altman-Z score of 3.01 indicates that ADP is not in any danger for bankruptcy at the moment.
ADP has a Altman-Z score (3.01) which is comparable to the rest of the industry.
ADP has a debt to FCF ratio of 1.99. This is a very positive value and a sign of high solvency as it would only need 1.99 years to pay back of all of its debts.
ADP has a Debt to FCF ratio of 1.99. This is in the better half of the industry: ADP outperforms 72.84% of its industry peers.
ADP has a Debt/Equity ratio of 1.41. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.41, ADP is not doing good in the industry: 81.48% of the companies in the same industry are doing better.
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 RankSector Rank
Debt/Equity 1.41
Debt/FCF 1.99
Altman-Z 3.01
ROIC/WACC2.83
WACC8.75%
ADP Yearly LT Debt VS Equity VS FCFADP Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B

2.3 Liquidity

A Current Ratio of 1.05 indicates that ADP should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.05, ADP is doing worse than 71.60% of the companies in the same industry.
A Quick Ratio of 1.05 indicates that ADP should not have too much problems paying its short term obligations.
ADP has a Quick ratio of 1.05. This is in the lower half of the industry: ADP underperforms 71.60% of its industry peers.
Industry RankSector Rank
Current Ratio 1.05
Quick Ratio 1.05
ADP Yearly Current Assets VS Current LiabilitesADP Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10B 20B 30B 40B 50B

4

3. Growth

3.1 Past

ADP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.93%, which is quite good.
The Earnings Per Share has been growing by 11.05% on average over the past years. This is quite good.
ADP shows a small growth in Revenue. In the last year, the Revenue has grown by 7.07%.
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)8.93%
EPS 3Y12.57%
EPS 5Y11.05%
EPS Q2Q%8.13%
Revenue 1Y (TTM)7.07%
Revenue growth 3Y7.61%
Revenue growth 5Y7.1%
Sales Q2Q%7.51%

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 7.85% on average per year.
Based on estimates for the next years, ADP will show a small growth in Revenue. The Revenue will grow by 5.65% on average per year.
EPS Next Y10.3%
EPS Next 2Y9.86%
EPS Next 3Y9.65%
EPS Next 5Y7.85%
Revenue Next Year6.2%
Revenue Next 2Y5.95%
Revenue Next 3Y5.91%
Revenue Next 5Y5.65%

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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
ADP Yearly Revenue VS EstimatesADP Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 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 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 5 10 15

2

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 30.79, which means the current valuation is very expensive for ADP.
60.49% of the companies in the same industry are cheaper than ADP, based on the Price/Earnings ratio.
ADP's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.24.
The Price/Forward Earnings ratio is 27.92, which means the current valuation is very expensive for ADP.
Based on the Price/Forward Earnings ratio, ADP is valued a bit more expensive than 60.49% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ADP to the average of the S&P500 Index (35.82), we can say ADP is valued slightly cheaper.
Industry RankSector Rank
PE 30.8
Fwd PE 27.92
ADP Price Earnings VS Forward Price EarningsADP Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

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 28.4
EV/EBITDA 19.35
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.
ADP has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.99
PEG (5Y)2.79
EPS Next 2Y9.86%
EPS Next 3Y9.65%

6

5. Dividend

5.1 Amount

ADP has a Yearly Dividend Yield of 2.02%.
Compared to an average industry Dividend Yield of 2.25, ADP pays a better dividend. On top of this ADP pays more dividend than 83.95% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, ADP has a dividend comparable with the average S&P500 company.
Industry RankSector Rank
Dividend Yield 2.02%

5.2 History

The dividend of ADP is nicely growing with an annual growth rate of 11.62%!
ADP has been paying a dividend for at least 10 years, so it has a reliable track record.
ADP has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)11.62%
Div Incr Years26
Div Non Decr Years26
ADP Yearly Dividends per shareADP Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1 2 3 4 5

5.3 Sustainability

58.80% 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.
DP58.8%
EPS Next 2Y9.86%
EPS Next 3Y9.65%
ADP Yearly Income VS Free CF VS DividendADP Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 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

AUTOMATIC DATA PROCESSING

NASDAQ:ADP (8/22/2025, 8:00:00 PM)

After market: 307.95 0 (0%)

307.95

+3.01 (+0.99%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)07-30 2025-07-30/bmo
Earnings (Next)10-28 2025-10-28/bmo
Inst Owners85.28%
Inst Owner Change-0.11%
Ins Owners0.11%
Ins Owner Change11.89%
Market Cap124.73B
Analysts67.62
Price Target325.13 (5.58%)
Short Float %1.27%
Short Ratio3.22
Dividend
Industry RankSector Rank
Dividend Yield 2.02%
Yearly Dividend5.9
Dividend Growth(5Y)11.62%
DP58.8%
Div Incr Years26
Div Non Decr Years26
Ex-Date09-12 2025-09-12 (1.54)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.1%
Min EPS beat(2)0.35%
Max EPS beat(2)1.85%
EPS beat(4)4
Avg EPS beat(4)2.06%
Min EPS beat(4)0.35%
Max EPS beat(4)4.53%
EPS beat(8)8
Avg EPS beat(8)1.67%
EPS beat(12)12
Avg EPS beat(12)1.7%
EPS beat(16)16
Avg EPS beat(16)2.33%
Revenue beat(2)2
Avg Revenue beat(2)0.38%
Min Revenue beat(2)0.11%
Max Revenue beat(2)0.64%
Revenue beat(4)4
Avg Revenue beat(4)0.38%
Min Revenue beat(4)0.11%
Max Revenue beat(4)0.64%
Revenue beat(8)4
Avg Revenue beat(8)-0.16%
Revenue beat(12)7
Avg Revenue beat(12)-0.04%
Revenue beat(16)11
Avg Revenue beat(16)0.12%
PT rev (1m)0.82%
PT rev (3m)2.68%
EPS NQ rev (1m)-3.38%
EPS NQ rev (3m)-2.39%
EPS NY rev (1m)0.36%
EPS NY rev (3m)0.48%
Revenue NQ rev (1m)0.68%
Revenue NQ rev (3m)0.78%
Revenue NY rev (1m)0.52%
Revenue NY rev (3m)0.59%
Valuation
Industry RankSector Rank
PE 30.8
Fwd PE 27.92
P/S 6.07
P/FCF 28.4
P/OCF 25.25
P/B 20.16
P/tB 95.11
EV/EBITDA 19.35
EPS(TTM)10
EY3.25%
EPS(NY)11.03
Fwd EY3.58%
FCF(TTM)10.85
FCFY3.52%
OCF(TTM)12.2
OCFY3.96%
SpS50.76
BVpS15.28
TBVpS3.24
PEG (NY)2.99
PEG (5Y)2.79
Profitability
Industry RankSector Rank
ROA 7.64%
ROE 65.93%
ROCE 44.92%
ROIC 24.78%
ROICexc 46.35%
ROICexgc 100.97%
OM 26.42%
PM (TTM) 19.84%
GM 47.37%
FCFM 21.36%
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%
ROICexcg growth 3Y-1.22%
ROICexcg 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-Score8
Asset Turnover0.39
Health
Industry RankSector Rank
Debt/Equity 1.41
Debt/FCF 1.99
Debt/EBITDA 1.45
Cap/Depr 93.92%
Cap/Sales 2.66%
Interest Coverage 12.73
Cash Conversion 82.14%
Profit Quality 107.67%
Current Ratio 1.05
Quick Ratio 1.05
Altman-Z 3.01
F-Score8
WACC8.75%
ROIC/WACC2.83
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)8.93%
EPS 3Y12.57%
EPS 5Y11.05%
EPS Q2Q%8.13%
EPS Next Y10.3%
EPS Next 2Y9.86%
EPS Next 3Y9.65%
EPS Next 5Y7.85%
Revenue 1Y (TTM)7.07%
Revenue growth 3Y7.61%
Revenue growth 5Y7.1%
Sales Q2Q%7.51%
Revenue Next Year6.2%
Revenue Next 2Y5.95%
Revenue Next 3Y5.91%
Revenue Next 5Y5.65%
EBIT growth 1Y8.87%
EBIT growth 3Y12.61%
EBIT growth 5Y11.57%
EBIT Next Year18.77%
EBIT Next 3Y11.47%
EBIT Next 5Y10.37%
FCF growth 1Y22.22%
FCF growth 3Y19.94%
FCF growth 5Y12.76%
OCF growth 1Y18.81%
OCF growth 3Y16.81%
OCF growth 5Y10.3%