Latest Ratios: P/E Ratio 24.1x · EV/EBITDA 23.3x · ROE 72.2%. (1997–2026 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $105.4B | $89.5B | $126.0B | $98.4B | $91.4B | $88.4B | $85.0B | $64.4B | $72.3B | $59.5B | $46.1B |
| Enterprise Value | $106.4B | $90.5B | $131.8B | $99.2B | $92.7B | $90.5B | $85.8B | $64.9B | $72.7B | $59.3B | $45.4B |
| P/E Ratio → | 24.08 | 20.45 | 30.90 | 26.23 | 26.77 | 30.01 | 32.72 | 26.12 | 31.55 | 31.56 | 26.61 |
| P/S Ratio | 4.80 | 4.08 | 6.13 | 5.12 | 5.07 | 5.36 | 5.67 | 4.42 | 5.10 | 4.46 | 3.73 |
| P/B Ratio | 17.46 | 14.83 | 20.37 | 21.64 | 26.04 | 27.42 | 15.00 | 11.20 | 13.40 | 12.56 | 11.60 |
| P/FCF | 20.10 | 17.06 | 26.42 | 27.37 | 25.13 | 34.74 | 32.86 | 26.73 | 34.10 | 29.09 | 27.87 |
| P/OCF | 19.37 | 16.44 | 25.52 | 23.66 | 21.71 | 28.54 | 27.49 | 21.29 | 26.91 | 23.64 | 21.70 |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 4.12 | 6.41 | 5.16 | 5.15 | 5.49 | 5.72 | 4.45 | 5.13 | 4.45 | 3.66 |
| EV / EBITDA | 23.30 | 19.80 | 22.34 | 18.02 | 18.34 | 20.96 | 22.37 | 17.91 | 21.29 | 20.06 | 16.59 |
| EV / EBIT | 26.10 | 15.44 | 22.89 | 18.93 | 19.75 | 23.26 | 25.08 | 19.72 | 23.17 | 24.86 | 17.37 |
| EV / FCF | — | 17.25 | 27.62 | 27.59 | 25.50 | 35.55 | 33.16 | 26.92 | 34.25 | 29.00 | 27.40 |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 48.2% | 48.2% | 50.8% | 49.9% | 48.9% | 46.9% | 46.5% | 46.0% | 46.7% | 45.4% | 45.6% |
| Operating Margin | 18.6% | 18.6% | 26.3% | 25.7% | 25.0% | 23.1% | 22.2% | 21.5% | 21.2% | 19.3% | 19.5% |
| Net Profit Margin | 20.1% | 20.1% | 19.8% | 19.5% | 18.9% | 17.9% | 17.3% | 16.9% | 16.2% | 12.2% | 14.0% |
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 72.2% | 72.2% | 76.0% | 93.1% | 101.3% | 66.3% | 45.5% | 44.2% | 45.2% | 37.2% | 41.0% |
| ROA | 7.6% | 7.6% | 7.6% | 7.1% | 6.0% | 5.3% | 5.9% | 6.1% | 5.7% | 4.3% | 4.3% |
| ROIC | 32.2% | 32.2% | 47.1% | 72.6% | 66.6% | 48.6% | 39.5% | 39.6% | 43.8% | 49.8% | 55.8% |
| ROCE | 32.3% | 32.3% | 50.6% | 56.5% | 55.9% | 40.9% | 33.7% | 34.3% | 34.0% | 32.6% | 31.8% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 0.87 | 0.87 | 1.46 | 0.81 | 0.98 | 1.08 | 0.59 | 0.41 | 0.42 | 0.42 | 0.50 |
| Debt / EBITDA | 1.15 | 1.15 | 1.54 | 0.67 | 0.68 | 0.81 | 0.87 | 0.65 | 0.66 | 0.68 | 0.73 |
| Net Debt / Equity | — | 0.17 | 0.92 | 0.17 | 0.39 | 0.64 | 0.14 | 0.08 | 0.06 | -0.04 | -0.20 |
| Net Debt / EBITDA | 0.23 | 0.23 | 0.97 | 0.14 | 0.27 | 0.48 | 0.20 | 0.12 | 0.09 | -0.06 | -0.28 |
| Debt / FCF | — | 0.20 | 1.20 | 0.22 | 0.37 | 0.81 | 0.30 | 0.18 | 0.15 | -0.08 | -0.47 |
| Interest Coverage | 12.77 | 12.77 | 12.63 | 14.32 | 18.22 | 45.08 | 57.30 | 30.72 | 24.14 | 23.23 | 32.64 |
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 0.17 | 0.17 | 1.05 | 1.01 | 0.99 | 0.99 | 1.07 | 1.05 | 1.05 | 1.05 | 1.10 |
| Quick Ratio | 0.17 | 0.17 | 1.05 | 1.01 | 0.99 | 0.99 | 1.07 | 1.05 | 1.05 | 1.05 | 1.10 |
| Cash Ratio | 0.08 | 0.08 | 0.19 | 0.07 | 0.05 | 0.03 | 0.07 | 0.06 | 0.06 | 0.07 | 0.09 |
| Asset Turnover | — | 0.35 | 0.39 | 0.35 | 0.35 | 0.26 | 0.31 | 0.37 | 0.34 | 0.34 | 0.33 |
| Inventory Turnover | — | — | — | — | — | — | — | — | — | — | — |
| Days Sales Outstanding | — | 58.56 | 63.54 | 65.16 | 60.99 | 70.14 | 66.34 | 61.08 | 62.81 | 54.34 | 50.23 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | 2.5% | 2.9% | 1.9% | 2.2% | 2.1% | 1.9% | 1.9% | 2.3% | 1.8% | 1.8% | 2.2% |
| Payout Ratio | 59.5% | 59.5% | 58.8% | 58.2% | 55.8% | 56.3% | 60.6% | 59.6% | 56.4% | 65.6% | 57.4% |
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 4.2% | 4.9% | 3.2% | 3.8% | 3.7% | 3.3% | 3.1% | 3.8% | 3.2% | 3.2% | 3.8% |
| FCF Yield | 5.0% | 5.9% | 3.8% | 3.7% | 4.0% | 2.9% | 3.0% | 3.7% | 2.9% | 3.4% | 3.6% |
| Buyback Yield | 2.0% | 2.3% | 1.0% | 1.3% | 1.2% | 2.2% | 1.6% | 1.6% | 1.3% | 1.7% | 2.7% |
| Total Shareholder Yield | 4.5% | 5.3% | 2.9% | 3.5% | 3.3% | 4.1% | 3.5% | 3.8% | 3.1% | 3.5% | 4.9% |
| Shares Outstanding | — | $399M | $409M | $412M | $416M | $421M | $428M | $433M | $438M | $443M | $450M |
Includes 30+ ratios · 30 years · Updated daily
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Quick answers to the most common questions about buying ADP stock.
Automatic Data Processing, Inc.'s current P/E ratio is 24.1x. The historical average is 24.5x. This places it at the 43th percentile of its historical range.
Automatic Data Processing, Inc.'s current EV/EBITDA is 23.3x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 14.6x.
Automatic Data Processing, Inc.'s return on equity (ROE) is 72.2%. This is above the typical threshold of 15-20% considered good for most companies. The historical average is 35.6%.
Based on historical data, Automatic Data Processing, Inc. is trading at a P/E of 24.1x. This is at the 43th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Automatic Data Processing, Inc.'s current dividend yield is 2.49% with a payout ratio of 59.5%.
Automatic Data Processing, Inc. has 48.2% gross margin and 18.6% operating margin. Operating margin between 10-20% is typical for established companies.
Automatic Data Processing, Inc.'s Debt/EBITDA ratio is 1.2x, indicating moderate leverage. A ratio below 2x is generally considered financially healthy.
Key Metrics
Top Statement Risk
Margin compression from competition
Metrics are mathematically derived from official filings.
Margin Volatility Masks Core Stability
ADP's gross margin improved to 53.0% in 2026Q4, yet operating margin swung from -2.4% to 30.1% over the past year, per income statement data, suggesting non-recurring items distort underlying profitability.
The wide quarterly swings in operating margin, from -2.4% in 2026Q1 to 30.1% in 2026Q3, appear to reflect one-time items rather than a structural shift in earning power. Net margin has been more stable, hovering around 18-23%, which may better capture the recurring earnings capacity. Investors should focus on normalized operating margin, which likely sits in the mid-20s, to gauge true profitability.
ROIC Oscillates with Client Fund Timing
ROIC ranged from -0.7% to 21.6% over the last ten quarters, with the latest at 11.8%, according to balance sheet data, indicating that returns are heavily influenced by client fund balances and not just operational efficiency.
The extreme volatility in ROIC, including a negative reading in 2026Q1, suggests that the metric is distorted by the timing of client fund assets and liabilities, which are not part of the core operating capital. Excluding these client fund effects, ROIC likely trends in the mid-teens, reflecting a stable, high-return business. The recent 11.8% is below the 21.6% seen in 2024Q3, but this may be a timing artifact rather than a deterioration in capital efficiency.
Working Capital Efficiency Obscured by Client Funds
DSO improved to 59 days in 2026Q4 from 66 days a year earlier, while DPO remained minimal at 5 days, based on reported figures, indicating that ADP's working capital metrics are dominated by client fund flows rather than core receivables management.
The cash conversion cycle is not calculable due to missing DIO data, but the extremely low DPO suggests that ADP does not rely on supplier financing. The improvement in DSO is modest and may reflect changes in client payment timing rather than operational efficiency. The real driver of working capital swings is the client fund float, which can create large temporary swings in cash and liabilities, as seen in the current ratio drop to 0.17 in 2026Q4.
Leverage Ratios Distorted by Client Fund Liabilities
D/E fluctuated between 0.68 and 1.62 over the past year, with the latest at 0.87, while interest coverage remained comfortable at 9.4x, according to balance sheet data, suggesting that reported leverage overstates the core business risk.
The dramatic swings in D/E, including a spike to 1.49 in 2026Q1, appear to be driven by client fund obligations rather than strategic borrowing. Excluding these client-related liabilities, ADP's core leverage is likely much lower, as the company's debt is primarily used to fund the float. Interest coverage of 9.4x in 2026Q4, though down from 22.6x in 2025Q3, remains adequate, but investors should monitor the trend as it may indicate rising debt levels or lower operating income.
Liquidity Metrics Mask Client Fund Dynamics
The current ratio collapsed to 0.17 in 2026Q4 from 1.05 in the prior quarter, per balance sheet data, but this likely reflects a surge in client fund liabilities rather than a genuine liquidity crisis.
The sharp drop in the current ratio is alarming at face value, but it is likely a result of timing in client fund collections and payments, which can temporarily inflate current liabilities. ADP's core liquidity, excluding client funds, appears stable, as the company generates strong operating cash flow and has access to capital markets. However, the low quick ratio of 0.17 in 2026Q4 warrants monitoring, as it could indicate a temporary strain if client fund outflows are not matched by inflows.
P/E Misleads on ADP's True Value
ADP's P/E of 24.78 appears reasonable, but the metric is distorted by non-recurring items and client fund effects, as per valuation data, obscuring the company's stable recurring earnings power.
The P/E ratio is commonly used to value ADP, but it can be misleading due to the volatility in reported earnings caused by one-time items and client fund timing. A more appropriate metric is EV/EBITDA, which at 23.96 is higher than peers like Paychex (15.63) and Paycom (15.49), suggesting that ADP trades at a premium that may not be justified by its growth prospects. Investors should also consider P/FCF of 20.68, which reflects the company's strong cash generation but still implies a premium valuation relative to its growth rate.