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AUTOMATIC DATA PROCESSING INC (ADP)

Services-Computer Processing & Data Preparation · Services-Computer Processing & Data Preparation · NASDAQ

$263.96

+2.29%

Investru Score

57.3 / 100

Good

Why is ADP moving?

ADP is up 2.29% today, amid an otherwise sideways trend.

Recent coverage: Evaluating Automatic Data Processing Against Peers In Professional Services Industry

Business overview

  • The company operates in the computer processing and data preparation industry within the services sector.
  • Market capitalization stands at 105,003,287,999.99998 USD.

These characteristics demonstrate a large-scale, established operational footprint in the data services market.

Bull case

The bull case relies on the company's exceptional return on equity and strong earnings quality to sustain premium profitability. If macroeconomic conditions remain supportive, steady single-digit revenue growth can continue to compound shareholder value.

Bear case

The bear case centers on the risk that single-digit growth combined with a tight current ratio could leave the company vulnerable to demand slowdowns. A high PEG ratio also introduces downside risk if growth fails to accelerate.

ADP’s Investru Score changed -5.5 points recently. Want to know exactly what changed and why? That’s a Pro feature →

Score breakdown

Financial Quality
79
Growth
38
Profitability
60
Balance Sheet
42
Valuation
71
Momentum
40

Score history

-5.5 over the last 32 days, driven mainly by momentum (-57).

Financial quality

  • Return on invested capital is 40.1%.
  • Return on equity is 73.2%.
  • Earnings quality ratio is 1.23.

These high returns on capital and strong earnings quality indicate that management generates substantial returns from the company's equity and capital investments.

ROIC
40.1%
ROE
73.2%
FCF Margin
Data unavailable
Free Cash Flow (TTM)
Data unavailable
Earnings Quality (OCF ÷ Net Income)
1.2x

Valuation

  • Trailing P/E ratio is 22.42.
  • Forward P/E ratio is 21.56.
  • Trailing PEG ratio is 2.33.
  • Forward PEG ratio is 2.24.
  • Median PEG ratio is 2.29.
  • Price-to-sales ratio is 4.77.

These valuation multiples suggest that the stock is moderately priced relative to its current earnings and growth trajectory.

P/E (TTM)
22.4x
Forward P/E
21.6x
PEG (P/E ÷ EPS Growth)
2.3x
Company Median PEG
2.3x
Price / Sales
4.8x
EV / EBITDA
Data unavailable
FCF Yield
Data unavailable

Key risks

  • A narrow current ratio of 1.05 could constrain short-term liquidity if unexpected obligations arise.(Probability: Medium · Impact: Medium)
  • Single-digit revenue growth of 6.7% leaves limited room for error if macroeconomic conditions soften.(Probability: Medium · Impact: High)
  • A trailing PEG ratio of 2.33 suggests the valuation may be elevated relative to the underlying growth rate.(Probability: Medium · Impact: Medium)

Latest earnings

Q3 FY26 EPS
$3.38
Estimate
$3.33
Surprise
+1.7%
  • EPS growth year-over-year is 9.6%.
  • Earnings quality ratio is 1.23.

These earnings metrics demonstrate consistent bottom-line progress supported by reliable conversion of earnings.

SEC filings

Event filings (8-K) aren't covered by this page's data source yet — only 10-K/10-Q are shown above.

Market cap $105.0B · 52-week range $188.16–$293.51 · market data as of Oct 1, 2026, 4:00 PM ET · latest SEC filing: 2026-08-05

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Analyze ADP with Investru AI

Not investment advice. Investru AI summarizes public data and AI-generated analysis for informational purposes only.