Automatic Data Processing, Inc.

NasdaqGS:ADP Stock Report

Market Cap: US$99.3b

Automatic Data Processing Valuation

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

Valuation Score

4/6

Valuation Score 4/6

  • 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 ($245.82) is trading below our estimate of fair value ($390.31)

Significantly Below Fair Value: ADP is trading below fair value by more than 20%.


Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

ADP key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue5.3x
Enterprise Value/EBITDA18.1x
PEG Ratio4.2x

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 Average58.5x
PAYX Paychex
26.5x5.9%US$43.8b
DAY Dayforce
168.9x37.3%US$8.5b
RHI Robert Half
19.3x11.2%US$6.6b
PAYC Paycom Software
19.4x2.9%US$8.8b
ADP Automatic Data Processing
27.2x6.5%US$99.3b

Price-To-Earnings vs Peers: ADP is good value based on its Price-To-Earnings Ratio (27.2x) compared to the peer average (58.5x).


Price to Earnings Ratio vs Industry

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

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a18.4%
n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a18.4%
n/an/an/a
No more companies

Price-To-Earnings vs Industry: ADP is expensive based on its Price-To-Earnings Ratio (27.2x) compared to the US Professional Services industry average (26.9x).


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 Ratio27.2x
Fair PE Ratio33.7x

Price-To-Earnings vs Fair Ratio: ADP is good value based on its Price-To-Earnings Ratio (27.2x) compared to the estimated Fair Price-To-Earnings Ratio (33.7x).


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
CurrentUS$245.82
US$258.86
+5.3%
4.8%US$282.00US$238.00n/a17
Jul ’25US$235.67
US$259.33
+10.0%
4.6%US$282.00US$238.00n/a17
Jun ’25US$244.92
US$259.33
+5.9%
4.6%US$282.00US$238.00n/a17
May ’25US$247.33
US$258.90
+4.7%
4.4%US$280.00US$238.00n/a18
Apr ’25US$245.31
US$257.34
+4.9%
5.2%US$280.00US$235.00n/a18
Mar ’25US$249.69
US$256.51
+2.7%
5.4%US$280.00US$227.00n/a18
Feb ’25US$247.08
US$252.80
+2.3%
5.5%US$280.00US$227.00n/a17
Jan ’25US$232.97
US$246.98
+6.0%
6.8%US$280.00US$217.00n/a18
Dec ’24US$232.94
US$246.98
+6.0%
6.8%US$280.00US$217.00n/a18
Nov ’24US$210.37
US$248.55
+18.2%
6.9%US$280.00US$217.00n/a17
Oct ’24US$240.58
US$258.38
+7.4%
6.9%US$285.00US$225.00n/a17
Sep ’24US$255.75
US$257.69
+0.8%
6.8%US$285.00US$225.00n/a18
Aug ’24US$248.32
US$253.67
+2.2%
6.2%US$285.00US$225.00n/a18
Jul ’24US$219.79
US$230.33
+4.8%
8.8%US$275.00US$176.00US$235.6718
Jun ’24US$211.81
US$230.59
+8.9%
8.8%US$275.00US$180.00US$244.9217
May ’24US$221.12
US$231.76
+4.8%
9.1%US$275.00US$180.00US$247.3317
Apr ’24US$222.63
US$243.71
+9.5%
6.5%US$278.00US$213.00US$245.3117
Mar ’24US$219.56
US$245.18
+11.7%
6.6%US$278.00US$213.00US$249.6917
Feb ’24US$226.73
US$245.18
+8.1%
6.6%US$278.00US$213.00US$247.0817
Jan ’24US$238.86
US$250.76
+5.0%
8.1%US$285.00US$213.00US$232.9717
Dec ’23US$267.95
US$248.88
-7.1%
7.4%US$280.00US$213.00US$232.9417
Nov ’23US$243.64
US$247.76
+1.7%
7.0%US$280.00US$213.00US$210.3717
Oct ’23US$226.19
US$244.82
+8.2%
8.2%US$280.00US$208.00US$240.5817
Sep ’23US$245.96
US$243.06
-1.2%
8.2%US$280.00US$208.00US$255.7517
Aug ’23US$241.32
US$236.82
-1.9%
7.2%US$280.00US$208.00US$248.3217
Jul ’23US$213.23
US$232.59
+9.1%
5.4%US$257.00US$201.00US$219.7917

Analyst Forecast: Target price is less than 20% higher than the current share price.


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