Automatic Data Processing, Inc. (ADP) AI Stock Analysis

Automatic Data Processing, Inc. (ADP) is a global provider of cloud-based human capital management solutions. It operates through two primary segments: Employer Services and Professional Employer Organization (PEO). The Employer Services segment offers cloud-based platforms for payroll, benefits administration, talent management, HR management, workforce management, insurance, retirement, and compliance services. Through its PEO Services segment, ADP provides HR outsourcing solutions to small and mid-sized businesses using a co-employment model, giving clients access to benefits packages, compliance management, talent engagement strategies, and recruitment process outsourcing.

ADP expanded revenue from $16.50B in FY2022 to $21.95B in FY2026, delivering a 5-year revenue CAGR of 7.9%. Revenue grew 6.7% in FY2026, following 7.1% growth in FY2025. Gross margin was 48.2% in FY2026 compared to 50.8% in FY2025, while operating margin was 18.6% versus 26.3% in FY2025. Net income rose from $2.95B in FY2022 to $4.41B in FY2026, producing a net margin of 20.1% and diluted EPS of $11.12. For the latest quarter ended June 30, 2026, quarterly revenue growth was 6.8% year-over-year, and quarterly earnings grew 9.8% year-over-year.

As of June 30, 2026, ADP held $4.23B in cash and short-term investments alongside total debt of $5.27B, resulting in net debt of $1.04B. Shareholders' equity totaled $6.03B, with a debt-to-equity ratio of 0.87 and a current ratio of 1.05. In FY2026, operating cash flow reached $5.44B and free cash flow was $5.24B. The company deployed cash by spending $196.6M on capital expenditures, returning $2.08B to share buybacks, and distributing $2.63B in dividends paid.

ADP carries a market capitalization of $114.48B and an enterprise value of $105.79B. The stock trades at a trailing P/E of 26.4x and a forward P/E of 22.0x, below the median of its Nasdaq-100 Technology peers of 43.3x and 25.7x, respectively. Its price-to-sales multiple is 5.2x compared to the peer median of 12.4x, while EV to EBITDA stands at 16.0x against the peer median of 32.8x. Over the past year, ADP returned 6.1%, trailing the S&P 500 return of 16.8%, and gained 51.7% over 5 years versus 83.0% for the index.

ADP pays a quarterly dividend with an annualized forward payout of $6.80, representing a dividend yield of 2.35%. The payout ratio stands at 61.2%. The company has paid dividends for 53 consecutive years, with an annualized 5-year dividend growth rate of 11.5%. Its last ex-dividend date was September 11, 2026.

Wall Street coverage consists of 4 Strong Buy, 0 Buy, 12 Hold, 1 Sell, and 1 Strong Sell ratings. The mean price target is $286.40, which is 0.9% below the last close of $288.90. For the fiscal year ending June 30, 2027, consensus estimates project revenue of $23.23B and EPS of $12.26, indicating 10.3% EPS growth. ADP beat EPS estimates in each of the last 4 quarters, and its next earnings date is October 28, 2026.

This page is an AI-written research summary of Automatic Data Processing, Inc. (ADP). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

Related: ADP income statement, ADP balance sheet, ADP key metrics, ADP analyst forecast, ADP chart. See the ADP stock overview for the latest quote and news.