Skip to Content
Morningstar
Get 14 Days Free

Automatic Data Processing Inc ADP

Morningstar Rating
Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

ADP's Medium-Term Outlook Improves Amid Labor Shortages and Regulatory Change; FVE Up 7% to $216

Emma Williams Equity Analyst

Analyst Note

| Emma Williams |

We’ve raised our fair value estimate for wide-moat ADP 7% to $216 per share on upgraded medium-term forecasts following the fiscal 2021 Investor Day. At current share prices, ADP is trading at about a 9% premium to our updated fair value estimate.

Read Full Analysis

Company Profile

Business Description

ADP is a provider of payroll and human capital management solutions servicing the full scope of businesses from micro to global enterprises. ADP was established in 1949 and serves over 920,000 clients primarily in the United States. ADP's employer services segment offers payroll, HCM solutions, HR outsourcing, insurance and retirement services. The smaller but faster-growing PEO segment provides HR outsourcing solutions to small and midsize businesses through a co-employment model.

Contact
One ADP Boulevard
Roseland, NJ, 07068
T +1 973 974-5000
Sector Industrials
Industry Staffing & Employment Services
Most Recent Earnings Sep 30, 2021
Fiscal Year End Jun 30, 2021
Stock Type Cyclical
Employees 56,000

Related

Our Picks
5 Superior High-Quality Funds
These Morningstar Medalists have a significant portion of their assets tucked in wide-moat stocks.
Susan Dziubinski
Investing Specialists
Michael Reckmeyer and Matthew Hand: How to Protect Downside Amid Lofty Valuations and Paltry Yields
Two Wellington Management portfolio managers discuss how they manage risk at Vanguard Wellesley Income, why they’ve taken a liking to busted growth stocks, and where they’re finding durable sources of income.
Christine Benz
Premium Article
Are These Stocks Going the Way of the Titanic?
The moats of these 14 large-cap companies may be wide, but they’re deteriorating.
Susan Dziubinski
Investing Specialists
Our Ultimate Stock-Pickers' Top 10 High-Conviction and New-Money Purchases
The financial services and technology sectors each contributed three names to the high-conviction purchases list, and industrials contributed four to the new-money purchases list.
The Morningstar Ultimate Stock-Pickers Team
Our Picks
7 Wide-Moat Stocks to Avoid--For Now
These large companies have sustainable competitive advantages, but their stocks are too pricey for our taste.
Susan Dziubinski
US Videos
This Overpriced Wide-Moat Firm May Be Losing Its Edge
We have some concerns about Automatic Data Processing's moat.
Colin Plunkett
Stock Strategist
Can ADP Cut Its Way to Prosperity?
We believe Pershing Square's argument for doing so is flawed and nearsighted.
Colin Plunkett
US Videos
Ackman's ADP Argument Is Illogical
Activist Bill Ackman's claims that ADP can radically boost profitability don't hold water, and shares are already pricing in a rosy scenario.
Colin Plunkett
Stock Analyst Update
ADP’s Wide Moat May Be Under Threat
The firm’s competitive positioning is eroding, leading us to cut our fair value estimate and stewardship ratings.
Colin Plunkett
Stock Analyst Update
Ackman Targets ADP Hoping for Different Results
We are maintaining our fair value estimate amid the bid by Pershing Square to add directors to the ADP board.
Brett Horn
Investing Specialists
Ultimate Stock-Pickers: Top 10 Buys and Sells
Our top managers were net sellers during the most recent period but still found several names worth buying.
The Morningstar Ultimate Stock-Pickers Team
Stock Strategist
Payroll Processing Pays Off
Growth in the core payroll business has slowed, but Paychex's wide moat is intact.
Brett Horn
The Short Answer
How to Use Morningstar Ratings to Find Quality Stocks
A guide to understanding Morningstar analyst-driven stock ratings and how they work together.
Karen Wallace
Investing Specialists
Ultimate Stock-Pickers' Top 10 High-Conviction Purchases
These top investment managers put new money to work in several wide-moat names, including United Technologies.
The Morningstar Ultimate Stock-Pickers Team
US Videos
Paying Dividends Is a Priority for This Payroll Firm
Paychex is one of a few firms with both an abundant capacity to pay a big dividend and a strong willingness to do so, says Morningstar’s Josh Peters.
Josh Peters, CFA
US Videos
Focus on Long-Term Quality, Not Short-Term Rates
Despite a fully valued market, stocks are still the best place to be for long-run value creation, and interest rates should have little impact on company fundamentals, says Morningstar's Matt Coffina.
Matthew Coffina
US Videos
Sharpen Your Portfolio Plan for 2014 and Beyond
Roundtable Report: At the outset of 2014, Morningstar strategists dig into the market's current valuation and expected return, seek out high-quality U.S. and foreign stock opportunities, size up the role of cash today, assess the Fed's impact on the market, and reveal the best ways to fight inflation.
Jeremy Glaser
US Videos
Moat Investing: 2013, 2014, and Beyond
Morningstar StockInvestor editor Matt Coffina discusses how interest rates, key industry trends, commodity prices, and evaporating margins of safety are impacting StockInvestor's moat-focused Tortoise and Hare portfolios.
Matthew Coffina
US Videos
Special Report: Investing in a Volatile World
Morningstar's top strategists discuss their tips for investing in a rising-rate environment, where equity values lie, and some of their favorite investment ideas right now in this special midyear roundtable.
Jeremy Glaser
Credit Insights
U.S. Economy Falling Back Instead of Springing Forward
While credit spreads may tighten modestly, over the longer term the preponderance of credit spread tightening has run its course, says Morningstar's Dave Sekera.
David Sekera