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Automatic Data Processing Inc ADP

Morningstar Rating
$244.08 +0.23 (0.09%)
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Company Report

ADP Enjoys Sticky Clients and Steady Demand for Mission-Critical HCM Solutions

ADP has invested heavily over the past decade to develop public cloud native solutions and consolidate its portfolio of disparate platforms. ADP had successfully migrated most of its small and midsize clients to its strategic platforms as of fiscal 2021 and will be migrating enterprise clients to its new human capital management platform over the coming decade, as well as rolling out its new underlying payroll and tax engines. While we expect platform migrations to ultimately result in higher retention and profitability, the forced migrations will likely create a catalyst for enterprise clients to reassess providers, temporarily hindering both metrics.

Price vs Fair Value

ADP is trading at a 2% premium.
Price
$244.08
Fair Value
$431.00
Uncertainty
Medium
1-Star Price
$777.00
5-Star Price
$377.00
Economic Moat
Pqwm
Capital Allocation
Hjstmldm

Bulls Say, Bears Say

Bulls

ADP benefits from high client switching costs, a scale-based cost advantage, intangible brand assets, and a powerful referral network.

Bears

Payroll and HCM software is becoming increasingly commoditized, amplifying pricing pressure for providers.

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News

Trading Information

Previous Close Price
$243.85
Day Range
$243.12247.32
52-Week Range
$201.46256.84
Bid/Ask
$243.66 / $244.77
Market Cap
$100.27 Bil
Volume/Avg
1.4 Mil / 1.8 Mil

Key Statistics

Price/Earnings (Normalized)
28.61
Price/Sales
5.76
Dividend Yield (Trailing)
2.12%
Dividend Yield (Forward)
2.24%
Total Yield
3.16%

Company Profile

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 1 million clients primarily in the United States. ADP's employer services segment offers payroll, human capital management solutions, human resources outsourcing, insurance and retirement services. The smaller but faster-growing professional employer organization segment provides HR outsourcing solutions to small and midsize businesses through a co-employment model.
Sector
Industrials
Industry
Staffing & Employment Services
Stock Style Box
Large Core
Total Number of Employees
63,000

Competitors

Valuation

Metric
ADP
PAYX
PCTY
Price/Earnings (Normalized)
28.6127.7228.49
Price/Book Value
23.3712.169.67
Price/Sales
5.768.807.45
Price/Cash Flow
19.1121.6822.80
Price/Earnings
ADP
PAYX
PCTY

Financial Strength

Metric
ADP
PAYX
PCTY
Quick Ratio
0.100.430.12
Current Ratio
1.011.241.11
Interest Coverage
11.2457.72
Quick Ratio
ADP
PAYX
PCTY

Profitability

Metric
ADP
PAYX
PCTY
Return on Assets (Normalized)
6.57%14.17%6.84%
Return on Equity (Normalized)
99.25%46.62%32.78%
Return on Invested Capital (Normalized)
43.04%36.73%30.28%
Return on Assets
ADP
PAYX
PCTY
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