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Automatic Data Processing, Inc. — Intrinsic Value & Fair Price

ADP
NASDAQTechnologySoftware - ApplicationCIK 0000008670adp.comAbout ADP
Last close · Oct 16, 2026288.90+3.25 (+1.14%)
Market cap$114.5B
Model value · DCF · Perpetuity growth · 5y
175.56
ADP closed at $288.90 — overvalued by 65% vs model.
122.71the model's range326.05

DCF · Perpetuity growth · 5y leads for a mature, steady company — positive operating income and three years of positive free cash flow. From a five-year discounted cash flow.

Other models
91.87 – 354.90
Wall St. target
286.00 1% above
Above model, 1y
21 of 21 days

Price and model value

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What the marks mean
Daily close

Dividends

Quarterly · as of Oct 16, 2026
Yield, trailing 12 months
2.35%
Past 2 years
low 1.80%high 3.43%
Dividends per share, a year at a time
$3.72Sep ’21$4.16Sep ’22$5.00Sep ’23$5.60Sep ’24$6.16Sep ’25$6.80TTM
Dividends / free cash flow, FY2026
50.1%
Raised
42+ years in a row
Growth, 5 yrs
12.8% a year
Last change
+10.4% · Dec 2025
Every payment, with ex-dates · latest $1.70, paid Oct 1, 2026

Research on ADP

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How it is valued

Valued asMature & stable
Low/slowing growth (~7% recent)High profitability (20% net margin)Pays dividendsModerately volatile earnings
What growth the price implies: the reverse DCF

Key figures

FY2026 · chosen for mature companies
P/E
26.4×
EV / EBITDA
18.1×
FCF yield
4.5%
Dividend yield, TTM
2.35%
Beta
0.84
Cost of capital (WACC)
8.72%
Full financials

Analyst actions

third-party, quoted
08-03Cantor Fitzgerald · target310.00
07-30Guggenheim · target300.00
07-30Morgan Stanley · target286.00
05-18Wells Fargo · “Equal Weight” from “Underweight”upgrade
Ratings, targets and estimates

Comparable companies

by business, not by industry label

The weekly

One email a week across every stock we cover: 13F filings, insider trades, earnings and new research. It covers the whole market, not just ADP. No account.

About ADP

Automatic Data Processing, Inc. (ADP) is a global provider of cloud-based solutions designed for human capital management (HCM). The company organizes its operations into two primary segments: Employer Services and Professional Employer Organization (PEO). Through its Employer Services division, ADP delivers strategic, cloud-powered platforms and comprehensive human resources (HR) outsourcing. This encompasses a wide array of services such as payroll processing, benefits administration, talent acquisition and management, general HR and workforce management, insurance, retirement planning, and regulatory compliance, often integrated into holistic HCM solutions. Conversely, the Professional Employer Organization (PEO) segment specializes in offering HR outsourcing to small and mid-sized businesses, leveraging a co-employment framework. This segment's offerings span robust benefits packages, regulatory protection and compliance, talent engagement strategies, specialized HR expertise, all-encompassing outsourcing, and even recruitment process outsourcing. Established in 1949, ADP maintains its corporate headquarters in Roseland, New Jersey.

CEO
Maria Black
Headquarters
Roseland, NJ
Employees
67,000
IPO
1980-03-17
Full company profile

Model estimates for research reference only, not investment advice. Every model rests on assumptions that may not match what happens; the formulas are in how we value a stock.