Update shared on18 Sep 2025
Fair value Decreased 0.65%Analysts have slightly lowered ADP’s price target to $318.17, citing ongoing macroeconomic uncertainty and softer near-term bookings despite resilient long-term growth prospects in HCM, HR outsourcing, and payroll.
Analyst Commentary
- Sector-wide volatility in human capital management due to slowing macroeconomic and employment trends is tempering near-term price targets.
- Bearish analysts view increased downside risk in temporary staffing compared to stronger growth prospects in HCM software offerings.
- Long-term secular growth opportunities persist in payroll, HR outsourcing, analytics, and workforce management segments.
- Potential HCM-related multiple expansion could offset anticipated interest income headwinds if rates decline.
- While recent quarterly performance was solid and forward guidance contained no major surprises, lighter near-term bookings and macro volatility continue to weigh on outlook.
What's in the News
- ADP unveiled new AI-powered features across Workforce Now, ADP Global Payroll, and ADP Lyric HCM, focusing on automating manual HR tasks such as payroll anomaly detection, analytics production, compliance monitoring, and personalized learning recommendations via the ADP Assist platform.
- Early adopters of the new AI features report up to 30 minutes of time saved per payroll cycle due to proactive error prevention.
- The company emphasizes compliance, transparency, and security in its AI development, with each feature undergoing rigorous client testing before release.
- From April 1 to June 30, ADP repurchased 1,061,627 shares for $326.93 million, bringing total buybacks to 12,528,709 shares ($3,186.7 million), completing 3.05% of shares under the current program.
Valuation Changes
Summary of Valuation Changes for Automatic Data Processing
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $320.25 to $318.17.
- The Future P/E for Automatic Data Processing remained effectively unchanged, moving only marginally from 30.57x to 30.38x.
- The Discount Rate for Automatic Data Processing remained effectively unchanged, moving only marginally from 7.12% to 7.14%.
Disclaimer
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