Upside case
Bull case
$288+36.6%
ADP would need investors to value it at roughly 26x earnings — about 7x more generous than today's 19x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewHoldUpdated May 1, 2026
Automatic Data Processing, Inc. (ADP) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Hold
Covering
36
analysts
8 bullish · 6 bearish · 36 covering ADP
Strong Buy
0
Buy
8
Hold
22
Sell
6
Strong Sell
0
Consensus Target
$249
+18.2% vs today
Scenario Range
$162 – $288
Model bear to bull value window
Coverage
36
Published analyst ratings
Valuation Context
19.1x
Forward P/E · Market cap $84.8B
ADP price targets
Three scenarios for where ADP stock could go
Current
~$211
Confidence
83 / 100
Updated
May 1, 2026
Where we are now
Current · $211
Bear
$162
Base
$265
Bull
$288
Market caseClosest to today
Base case
$265+25.9%
At 24x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$162-22.9%
If investor confidence fades or macro conditions deteriorate, a 4x multiple contraction could push ADP down roughly 23% from where it trades now.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Automatic Data Processing, Inc.
ADP · NASDAQIndustrialsStaffing & Employment ServicesJune year-end
Automatic Data Processing is a global provider of cloud-based human capital management and payroll processing solutions. It generates revenue primarily through its Employer Services segment — offering payroll, HR outsourcing, and benefits administration — and its Professional Employer Organization segment, which provides comprehensive HR solutions through a co-employment model. The company's competitive advantage lies in its massive scale, deep compliance expertise across multiple jurisdictions, and entrenched client relationships that create high switching costs.
Market Cap
$84.8B
Revenue TTM
$21.6B
Net Income TTM
$4.3B
Net Margin
20.1%
ADP Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
100%Exceptional
12 quarters tracked
Revenue Beat Rate
100%Exceptional
vs consensus estimates
Avg EPS Surprise
+2.5%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 4 of 4Q3 2025
EPS
$2.26/$2.23
Revenue
$5.1B/$5.0B
Q4 2025
EPS
$2.49/$2.44
Revenue
$5.2B/$5.1B
Q1 2026
EPS
$2.62/$2.57
Revenue
$5.4B/$5.3B
Q2 2026
EPS
$3.37/$3.30
Revenue
$5.9B/$5.9B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $2.26/$2.23 | +1.3% | $5.1B/$5.0B | +1.6% |
| Q4 2025 | $2.49/$2.44 | +2.0% | $5.2B/$5.1B | +0.8% |
| Q1 2026 | $2.62/$2.57 | +1.9% | $5.4B/$5.3B | +0.4% |
| Q2 2026 | $3.37/$3.30 | +2.1% | $5.9B/$5.9B | +1.5% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$22.7B
+5.1% YoY
FY2
$24.3B
+7.3% YoY
EPS Outlook
FY1
$11.48
+6.3% YoY
FY2
$12.57
+9.5% YoY
Trailing FCF (TTM)$5.2B
FCF Margin: 23.8%
Next Earnings
—
Expected EPS
—
Expected Revenue
—
ADP beat EPS estimates in 4 of 4 tracked quarters. A perfect track record raises the bar for the upcoming report.
ADP Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $19.4B
Product Mix
Latest annual revenue by segment or product family
HCM
44.8%
+6.4% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
UNITED STATES
88.4%
+7.4% YoY
Tap, hover, or focus a slice to inspect segment detail.
HCM is the largest disclosed segment at 44.8% of FY 2025 revenue, up 6.4% YoY.
UNITED STATES is the largest reported region at 88.4%, up 7.4% YoY.
ADP Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Undervalued
Fair value est. $252 — implies +17.7% from today's price.
Upside to Fair Value
17.7%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
ADP
21.1x
vs
S&P 500
25.1x
16% discount
vs Industrials Trailing P/E
ADP
21.1x
vs
Industrials
25.7x
18% discount
vs ADP 5Y Avg P/E
Today
21.1x
vs
5Y Average
29.3x
28% discount
Forward PE
19.1x
S&P 500
19.1x
-0%
Industrials
20.7x
-8%
5Y Avg
—
—
Trailing PE
21.1x
S&P 500
25.1x
-16%
Industrials
25.7x
-18%
5Y Avg
29.3x
-28%
PEG Ratio
1.78x
S&P 500
1.72x
+4%
Industrials
1.64x
+8%
5Y Avg
—
—
EV/EBITDA
15.3x
S&P 500
15.2x
+1%
Industrials
13.7x
+12%
5Y Avg
20.4x
-25%
Price/FCF
17.8x
S&P 500
21.1x
-16%
Industrials
21.2x
-16%
5Y Avg
29.3x
-39%
Price/Sales
4.1x
S&P 500
3.1x
+32%
Industrials
1.6x
+160%
5Y Avg
5.5x
-25%
Dividend Yield
2.79%
S&P 500
1.87%
+49%
Industrials
1.27%
+120%
5Y Avg
1.99%
+40%
| Metric | ADP | S&P 500 | Industrials | 5Y Avg ADP |
|---|---|---|---|---|
| Forward PE | 19.1x | 19.1x | 20.7x | — |
| Trailing PE | 21.1x | 25.1x-16% | 25.7x-18% | 29.3x-28% |
| PEG Ratio | 1.78x | 1.72x | 1.64x | — |
| EV/EBITDA | 15.3x | 15.2x | 13.7x+12% | 20.4x-25% |
| Price/FCF | 17.8x | 21.1x-16% | 21.2x-16% | 29.3x-39% |
| Price/Sales | 4.1x | 3.1x+32% | 1.6x+160% | 5.5x-25% |
| Dividend Yield | 2.79% | 1.87% | 1.27% | 1.99% |
ADP trades above S&P 500 benchmarks on 1 of 6 measured multiples — appears modestly priced relative to the S&P 500 on most measures.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolADP Financial Health
Verdict
Exceptional
ADP generates $5.2B in free cash flow at a 23.8% margin — 47.1% ROIC signals a durable competitive advantage · returns 4.3% of market cap to shareholders annually.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$21.6B
Revenue Growth
TTM vs prior year
+6.9%
Gross Margin
Gross profit as a share of revenue
47.5%
Operating Margin
Operating income divided by revenue
19.2%
Net Margin
Net income divided by revenue
20.1%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$10.80
Free Cash Flow (TTM)
Cash generation after capex
$5.2B
FCF Margin
FCF as share of revenue — the primary cash quality signal
23.8%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
47.1%
ROA
Return on assets, trailing twelve months
6.8%
Cash & Equivalents
Liquid assets on the balance sheet
$3.3B
Net Debt
Total debt minus cash
$5.7B
Debt Serviceability
Net debt as a multiple of annual free cash flow
1.1× FCF
~1.1 years to full repayment at current FCF run-rate
ROE
Return on equity, trailing twelve months
68.7%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
4.3%
Dividend
2.8%
Buyback
1.5%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$1.3B
Dividend / Share
Annualized trailing dividend per share
$5.87
Payout Ratio
Share of earnings distributed as dividends
58.8%
Shares Outstanding
Declining as buybacks retire shares
403M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pageADP Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 11, 2026
High Risk
Cybersecurity & Data Privacy
ADP handles highly sensitive payroll data, making it a prime target for cyberattacks. A major breach or outage could erode client trust, trigger regulatory scrutiny, and lead to long‑term client losses.
High Risk
Employment Cycle Sensitivity
ADP’s revenue is tightly linked to the health of the labor market. A slowdown in hiring, increased layoffs, or reduced working hours—especially in the small‑business segment with higher churn—can directly curtail growth.
Medium
Interest Rate Fluctuations
ADP earns income from client funds held temporarily before remitting wages and taxes (float). A decline in interest rates can reduce this income, potentially dampening earnings growth.
Medium
Technological Execution & Modernization
Slow rollouts of cloud upgrades and platform improvements can erode client retention and new bookings. Payroll services require near‑perfect execution, and downtime or integration issues are intolerable for clients.
Medium
AI‑Driven Automation Threats
The increasing adoption of artificial intelligence poses a risk to ADP’s traditional payroll business, potentially curbing future growth prospects as competitors offer integrated AI‑powered solutions.
Medium
Insider Selling
Significant insider selling activity has been observed, which can signal a lack of confidence in the company’s near‑term prospects and may weigh on investor sentiment.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why ADP Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 11, 2026
Financial Growth and Stability
ADP’s Employer Services New ARR rose ~20% in H1 FY26, with a 7% CAGR from FY21‑FY25 and 12% CAGR in new business bookings. Q2 FY26 revenue grew 6%, adjusted EPS up 11%, and EBIT margin increased 80 basis points, while TTM revenue stands at $21.5 billion with a 23.8% operating margin.
Recurring Revenue and Cash Flow
ADP’s business model delivers predictable recurring revenue, enabling strong operating cash flow generation and efficient earnings‑to‑cash conversion.
Interest Income Driver
Client funds held by ADP generated ~$1.2 billion of high‑margin interest income in FY2025, adding a significant profit source.
Dominant Market Position
ADP is the leading cloud‑based HCM provider, serving businesses from small to large enterprises, with a market cap exceeding $82 billion and maintaining leadership despite AI‑integrated competitors.
Dividend King Sustainability
ADP offers a 3.3% annual dividend yield, with a projected payout ratio in the high‑50% range for FY26, underscoring its commitment to shareholder returns.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
ADP Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$210.60
52W Range Position
16%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$188.16
+11.9% from the low
52-Week High
$329.93
-36.2% from the high
1 Month
+3.06%
3 Month
-10.00%
YTD
-16.7%
1 Year
-30.7%
3Y CAGR
-0.8%
5Y CAGR
+1.7%
10Y CAGR
+9.3%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
ADP vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
19.1x
vs 12.5x median
+52% above peer median
Revenue Growth
+5.1%
vs +6.7% median
-24% below peer median
Net Margin
20.1%
vs 14.2% median
+42% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
ADP ADP Automatic Data Processing, Inc. | $84.8B | 19.1x | +5.1% | 20.1% | Hold | +18.2% |
PAY PAYX Paychex, Inc. | $33.3B | 16.9x | +6.7% | 26.4% | Hold | +20.8% |
G G Genpact Limited | $5.8B | 8.5x | +6.4% | 10.9% | Hold | +35.0% |
PAY PAYC Paycom Software, Inc. | $7.4B | 12.5x | +13.2% | 22.6% | Hold | +13.4% |
PCT PCTY Paylocity Holding Corporation | $5.8B | 13.9x | +12.5% | 14.2% | Buy | +56.1% |
WEX WEX WEX Inc. | $5.1B | 7.6x | +4.6% | 11.5% | Hold | +20.7% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
ADP Dividend and Capital Return
ADP returns 4.3% total yield, led by a 2.79% dividend, raised 42 consecutive years. Buybacks add another 1.5%.
Dividend SustainableFCF Well Covered
Total Shareholder Yield
4.3%
Dividend + buyback return per year
Buyback Yield
1.5%
Dividend Yield
2.79%
Payout Ratio
58.8%
How ADP Splits Its Return
Div 2.79%
Buyback 1.5%
Dividend 2.79%Buybacks 1.5%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$5.87
Growth Streak
Consecutive years of dividend increases
42Y
3Y Div CAGR
13.1%
5Y Div CAGR
11.5%
Ex-Dividend Date
—
Payment Cadence
Semi-Annual
5 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$1.3B
Estimated Shares Retired
6M
Approx. Share Reduction
1.5%
Shares Outstanding
Current diluted share count from the screening snapshot
403M
At 1.5%/year, buybacks mechanically lift EPS even with flat earnings — each remaining share represents a slightly larger piece of the company.
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $3.40 | — | — | — |
| 2025 | $6.32 | +10.1% | 1.0% | 2.9% |
| 2024 | $5.74 | +11.5% | 1.3% | 3.5% |
| 2023 | $5.15 | +17.8% | 1.2% | 3.3% |
| 2022 | $4.37 | +14.1% | 2.2% | 4.1% |
FAQ
7 questionsADP Investor Questions
Common questions answered from live analyst data and company financials.
01Is Automatic Data Processing, Inc. (ADP) stock a buy or sell in 2026?
Automatic Data Processing, Inc. (ADP) is rated Hold by Wall Street analysts as of 2026. Of 36 analysts covering the stock, 8 rate it Buy or Strong Buy, 22 rate it Hold, and 6 rate it Sell or Strong Sell. The consensus 12-month price target is $249, implying +18.2% from the current price of $211. The bear case scenario is $162 and the bull case is $288.
02What is the ADP stock price target for 2026?
The Wall Street consensus price target for ADP is $249 based on 36 analyst estimates. The high-end target is $281 (+33.4% from today), and the low-end target is $190 (-9.8%). The base case model target is $265.
03Is Automatic Data Processing, Inc. (ADP) stock overvalued in 2026?
ADP trades at 19.1x times forward earnings. The stock currently trades at a discount to the broader market. Based on current multiples versus the peer group, the relative model signals undervalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Automatic Data Processing, Inc. (ADP) stock in 2026?
The primary risks for ADP in 2026 are: (1) Cybersecurity & Data Privacy — ADP handles highly sensitive payroll data, making it a prime target for cyberattacks. (2) Employment Cycle Sensitivity — ADP’s revenue is tightly linked to the health of the labor market. (3) Interest Rate Fluctuations — ADP earns income from client funds held temporarily before remitting wages and taxes (float). Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Automatic Data Processing, Inc.'s revenue and earnings forecast?
Analyst consensus estimates ADP will report consensus revenue of $22.7B (+5.1% year-over-year) and EPS of $11.48 (+6.3% year-over-year) for the upcoming fiscal year. The following year, analysts project $24.3B in revenue.
06When does Automatic Data Processing, Inc. (ADP) report its next earnings?
A confirmed upcoming earnings date for ADP is not yet available. Check the Earnings section above for the most recent quarterly report dates and forward estimates.
07How much free cash flow does Automatic Data Processing, Inc. generate?
Automatic Data Processing, Inc. (ADP) generated $5.2B in free cash flow over the trailing twelve months — a free cash flow margin of 23.8%. ADP returns capital to shareholders through dividends (2.8% yield) and share repurchases ($1.3B TTM).