Automatic Data Processing, Inc.

DB:ADP Stock Report

Market Cap: €119.4b

Automatic Data Processing Valuation

Is ADP undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of ADP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ADP (€289.95) is trading below our estimate of fair value (€354.73)

Significantly Below Fair Value: ADP is trading below fair value, but not by a significant amount.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ADP?

Key metric: As ADP is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for ADP. This is calculated by dividing ADP's market cap by their current earnings.
What is ADP's PE Ratio?
PE Ratio32.3x
EarningsUS$3.85b
Market CapUS$124.34b

Price to Earnings Ratio vs Peers

How does ADP's PE Ratio compare to its peers?

The above table shows the PE ratio for ADP vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average27.5x
AAD Amadeus FiRe
12x7.2%€418.3m
6098 Recruit Holdings
40.2x9.6%JP¥14.6t
PAYX Paychex
30.6x6.3%US$52.0b
PAYC Paycom Software
27.4x2.4%US$12.9b
ADP Automatic Data Processing
32.3x6.5%€124.3b

Price-To-Earnings vs Peers: ADP is expensive based on its Price-To-Earnings Ratio (32.3x) compared to the peer average (27.5x).

Price to Earnings Ratio vs Industry

How does ADP's PE Ratio compare vs other companies in the European Professional Services Industry?

4 CompaniesPrice / EarningsEstimated GrowthMarket Cap
ADP 32.3xIndustry Avg. 18.3xNo. of Companies12PE01224364860+
4 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: ADP is expensive based on its Price-To-Earnings Ratio (32.3x) compared to the European Professional Services industry average (18.3x).

Price to Earnings Ratio vs Fair Ratio

What is ADP's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ADP PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio32.3x
Fair PE Ratio18.5x

Price-To-Earnings vs Fair Ratio: ADP is expensive based on its Price-To-Earnings Ratio (32.3x) compared to the estimated Fair Price-To-Earnings Ratio (18.5x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst ADP forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Current€289.95
€283.38
-2.3%
4.5%€308.36€265.66n/a15
Nov ’25€265.50
€274.00
+3.2%
4.3%€299.91€258.38n/a13
Oct ’25€249.90
€247.62
-0.9%
4.6%€277.39€232.65n/a16
Sep ’25€245.70
€245.47
-0.09%
4.5%€277.17€232.47n/a16
Aug ’25€243.50
€248.01
+1.9%
4.4%€265.96€220.55n/a17
Jul ’25€221.30
€241.75
+9.2%
4.6%€262.88€221.86n/a17
Jun ’25€223.70
€241.75
+8.1%
4.6%€262.88€221.86n/a17
May ’25€227.30
€242.15
+6.5%
4.4%€261.88€222.60n/a18
Apr ’25€229.00
€237.60
+3.8%
5.2%€258.52€216.98n/a18
Mar ’25€232.15
€237.32
+2.2%
5.4%€259.06€210.02n/a18
Feb ’25€228.50
€232.58
+1.8%
5.5%€257.60€208.84n/a17
Jan ’25€210.00
€230.92
+10.0%
6.8%€261.80€202.90n/a18
Dec ’24€210.00
€230.92
+10.0%
6.8%€261.80€202.90n/a18
Nov ’24€197.30
€235.23
+19.2%
6.9%€264.99€205.37€265.5017
Oct ’24€229.65
€241.94
+5.4%
6.9%€266.87€210.69€249.9017
Sep ’24€234.20
€237.59
+1.4%
6.8%€262.77€207.45€245.7018
Aug ’24€224.20
€230.10
+2.6%
6.2%€258.52€204.10€243.5018
Jul ’24€198.80
€211.47
+6.4%
8.8%€252.48€161.59€221.3018
Jun ’24€194.96
€212.46
+9.0%
8.8%€253.39€165.85€223.7017
May ’24€196.98
€210.33
+6.8%
9.1%€249.56€163.35€227.3017
Apr ’24€202.20
€224.67
+11.1%
6.5%€256.29€196.36€229.0017
Mar ’24€206.95
€225.64
+9.0%
6.6%€255.84€196.02€232.1517
Feb ’24€205.25
€225.64
+9.9%
6.6%€255.84€196.02€228.5017
Jan ’24€224.70
€238.05
+5.9%
8.1%€270.55€202.20€210.0017
Dec ’23€253.55
€239.28
-5.6%
7.4%€269.19€204.78€210.0017
Nov ’23€246.20
€248.58
+1.0%
7.0%€280.92€213.70€197.3017

Analyst Forecast: Target price is lower than the current share price.

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