For AI assistants & researchers — machine-readable summary of this page
What this page is: Delvantic's full research page for Automatic Data Processing Inc. (ADP) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-08-23): Designation Watch · Gem Score -1 (−100…+100 Quality+Value blend) · Quality 87 · Value -73 · Sentiment -3 (timing only, not weighted) · Composite fair value $201.90 vs $271.34 at analysis
Page map (sections in order; each card carries a stable
reference-name attribute you can cite):
profile-header/price-overview— company profile, live quote, market capextended-analysis— the core: three AI lens reads with findings, scores, and the analyst memofuture-predictions— our forward price-band predictionsmarket-narrative/ai-findings/gpt-critique— narrative context, cross-model findings, and an adversarial critique of our own analysis (near the end of the document)- Members-only sections (render as login gates for anonymous readers):
price-history,income-trend,key-metrics,financials(statement tables),insider-trading. The analysis above is public; the raw data tables require a free account.
More for machine readers: site briefing at
/llms.txt ·
any ticker resolves at delvantic.com/stock/TICKER ·
raw inputs are public-company filings and market data (via licensed data feeds);
every model, score, lens read, and prediction on this page is Delvantic's own analysis.
Automatic Data Processing Inc.
ADP NASDAQAutomatic Data Processing Inc. is a global provider of cloud-based human capital management and business outsourcing solutions. The company focuses on unifying payroll, human resources, talent management, time and attendance, tax, and benefits administration into integrated platforms for employers of all sizes. Through its Employer Services and Professional Employer Organization segments, Automatic Data Processing Inc. delivers payroll processing, tax filing and remittance, HR recordkeeping, workforce management, recruiting, and benefits administration, as well as co-employment solutions for clients seeking more comprehensive HR outsourcing. Its technology and services support organizations across industries including financial services, manufacturing, hospitality, construction, healthcare, retail, government, and education, helping them manage complex regulatory and compliance requirements. Headquartered in Roseland, New Jersey, and operating in over 140 countries and territories, Automatic Data Processing Inc. plays a central role in the global employment infrastructure by providing recurring, mission-critical HR and payroll services to businesses worldwide.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 10.94
Total Equity: $6.03B
Shares: 403,300,000
Total Debt: $4.97B
Cash: $4.23B
EBITDA: $5.91B
Total Debt: $4.97B
Cash: $4.23B
Revenue: $21.95B
Revenue: $21.95B
Revenue: $21.95B
Total Equity: $6.03B
Tax Rate: 23.0%
Equity: $6.03B
Total Debt: $4.97B
Cash: $4.23B
Current Liabilities: $50.02B
Long-Term Debt: $4.96B
Total Debt: $4.97B
Total Equity: $6.03B
Shares: 403,300,000
Shares: 403,300,000
CapEx: -$196.60M
Shares: 403,300,000
Stock Price: $271.34
Net Income: $4.41B
Industry Benchmarks
Income Statement (Annual)
Last updated: Aug 7, 2026 4:17am (16d ago)| Metric | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
| Revenue | $16.5B | $18.0B | $19.2B | $20.6B | $21.9B |
| Cost of Revenue | $9.5B | $10.0B | $10.5B | $11.1B | $11.8B |
| Gross Profit | $7.0B | $8.1B | $8.7B | $9.5B | $10.2B |
| Operating Expenses | $3.3B | $3.8B | $4.1B | $4.5B | $4.9B |
| Operating Income | $3.7B | $4.3B | $4.6B | $5.0B | $5.3B |
| Net Income | $2.9B | $3.4B | $3.8B | $4.1B | $4.4B |
| EBITDA | $4.2B | $4.8B | $5.1B | $5.5B | $5.9B |
| EPS | $7.04 | $8.25 | $9.14 | $10.02 | $10.97 |
| EPS (Diluted) | $7.00 | $8.21 | $9.10 | $9.98 | $10.94 |
Balance Sheet (Annual)
Last updated: Aug 7, 2026 4:17am (16d ago)| Metric | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
| Cash & Equivalents | $1.4B | $2.1B | $2.9B | $3.3B | $4.2B |
| Total Current Assets | $54.8B | $42.2B | $45.5B | $43.3B | $52.6B |
| Total Assets | $63.1B | $51.0B | $54.4B | $53.4B | $63.2B |
| Current Liabilities | $55.2B | $42.8B | $45.1B | $41.3B | $50.0B |
| Long-Term Debt | $3.0B | $3.0B | $3.0B | $4.0B | $5.0B |
| Total Liabilities | $59.8B | $47.5B | $49.8B | $47.2B | $57.2B |
| Total Equity | $3.2B | $3.5B | $4.5B | $6.2B | $6.0B |
| Retained Earnings | $20.7B | $22.1B | $23.6B | $25.2B | $27.0B |
Cash Flow (Annual)
Last updated: Aug 7, 2026 4:17am (16d ago)| Metric | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
| Operating Cash Flow | $3.1B | $4.2B | $4.2B | $4.9B | $5.4B |
| Capital Expenditure | -$174.4M | -$206.3M | -$208.4M | -$168.7M | -$196.6M |
| Free Cash Flow | $2.9B | $4.0B | $3.9B | $4.8B | $5.2B |
| Acquisitions (net) | -$11.7M | -$32.4M | -$33.6M | -$1.2B | -$22.8M |
| Net Debt Issued / (Repaid) | $-900,000 | -$1.0M | $-900,000 | $979.1M | $984.6M |
| Dividends Paid | -$1.7B | -$1.9B | -$2.2B | -$2.4B | -$2.6B |
| Stock Buybacks | -$2.0B | -$1.1B | -$1.2B | -$1.3B | -$2.1B |
| Net Change in Cash | $9.6B | -$14.0B | $1.3B | -$5.0B | $5.6B |
Growth Trends (YoY %)
Last updated: Aug 7, 2026 4:17am (16d ago)| Metric | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|
| Revenue Growth | +9.2% | +6.6% | +7.1% | +6.7% |
| Gross Profit Growth | +14.5% | +8.3% | +8.5% | +7.6% |
| Operating Income Growth | +14.3% | +7.8% | +8.1% | +7.3% |
| Net Income Growth | +15.7% | +10.0% | +8.7% | +8.2% |
| EBITDA Growth | +13.4% | +7.2% | +7.6% | +6.6% |
Dividend History (Last 20)
Last updated: Aug 5, 2026 9:46am (18d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-06-12 | $1.70 | — | — | — |
| 2026-03-13 | $1.70 | — | — | — |
| 2025-12-12 | $1.70 | — | — | — |
| 2025-09-12 | $1.54 | — | — | — |
| 2025-06-13 | $1.54 | — | — | — |
| 2025-03-14 | $1.54 | — | — | — |
| 2024-12-13 | $1.54 | — | — | — |
| 2024-09-13 | $1.40 | — | — | — |
| 2024-06-14 | $1.40 | — | — | — |
| 2024-03-07 | $1.40 | — | — | — |
| 2023-12-07 | $1.40 | — | — | — |
| 2023-09-07 | $1.25 | — | — | — |
| 2023-06-08 | $1.25 | — | — | — |
| 2023-03-09 | $1.25 | — | — | — |
| 2022-12-08 | $1.25 | — | — | — |
| 2022-09-08 | $1.04 | — | — | — |
| 2022-06-09 | $1.04 | — | — | — |
| 2022-03-10 | $1.04 | — | — | — |
| 2021-12-09 | $1.04 | — | — | — |
| 2021-09-09 | $0.93 | — | — | — |
Deep Analysis
Narrative Economics
market-narrative step).
Claude Reading
Starting with the raw numbers: ADP printed $21.95B in FY2026 revenue, up 6.8% YoY, with net income of $4.41B (net margin 20.1%) and FCF of $5.24B against a $107.8B market cap — that's a ~4.9% FCF yield. The quarterly cadence is remarkably clean: fiscal Q3 (March) is seasonally the fat quarter at ~22.9% margin (unemployment tax filings, W-2 processing), and every Q3 shows this pattern. The June 2026 quarter at 17.9% margin vs June 2025 at 17.8% is essentially flat sequentially YoY, which means the "margin expansion" thesis is more measured than the bulls claim — full-year operating margin went from 24.1% (FY25) to 24.2% (FY26), roughly 10 bps. Revenue growth is decelerating slightly: FY22→23 was 9.2%, FY25→26 was 6.8%. This is a 7% grower with 20 bps/year of margin creep and a 2.5% dividend, not a compounding rocket.
On valuation, I largely agree with the synthesis but think its $198 fair value is too punitive. At 24.8x earnings and 20.6x FCF for a business earning 60%+ ROIC with contractual revenue and negative working capital float (client funds held), a modest premium to the market multiple is defensible. My back-of-envelope: 7% top-line, 50 bps of annual margin lift, 2% buyback, 2.5% dividend → ~11-12% total return at a flat multiple. But the multiple isn't flat-safe; a de-rate to 20x on $18 FY27 EPS lands you at $360... wait, that's higher. Recompute: TTM EPS ≈ $10.94 (NI $4.41B / ~403M shares), so 24.8x checks out. At 20x forward $11.80, fair value is ~$236 — meaningfully below $271 but not the $198 the synthesis floats. I'd peg fair value at $230-245, implying 10-15% overvaluation, not 19%.
Where I dissent from the Market Forces model: calling ADP "dead money losing a winnable war to cloud-native competitors" is the kind of narrative that has been wrong for a decade. Rippling and Gusto have been "eating ADP's lunch" in SMB since 2018; meanwhile ADP grew revenue from $14.2B (FY19) to $21.95B (FY26), a 6.4% CAGR through a pandemic. The switching costs in payroll are underappreciated — you don't rip out the system that handles your 941s and state UI filings for a marginal UX improvement. That said, the bear case has a real kernel: FCF CAGR of 15.2% vs earnings CAGR of 8.5% is unsustainable and suggests working capital tailwinds (client float benefiting from higher rates) that will reverse when the Fed cuts. Strip out interest on funds held for clients and the underlying growth is closer to 5-6%. This is the contrarian point nobody's making: ADP's earnings quality benefited enormously from 5% rates on ~$35B of client float; a 200 bps rate cut cycle could shave $500M+ off pretax income.
Insider activity is noisy — a few small sales and one 3,619-share purchase in May doesn't move the needle either way; calling it "net insider buying" is generous. Balance sheet is fine ($4.97B debt vs $5.44B OCF), though the 0.82 D/E and only $4.23B cash aren't fortress-grade. ROE of 73% is optically absurd but reflects aggressive buybacks shrinking equity, not underlying capital efficiency — ROA of 7% is the honest number. I agree with the synthesis verdict that ADP is fully priced, but disagree on magnitude and the market-forces framing. The stock isn't a value trap; it's a high-quality compounder trading ~10-15% above where the math supports, with a hidden interest-rate sensitivity nobody is discounting. I'd wait for either $235 (buy zone) or a growth reacceleration catalyst. At $271 with a 2.5% yield and 7% growth, you're underwriting 9-10% returns with real downside if the float tailwind reverses — mediocre risk/reward.
GPT Reading
ADP looks exactly like what the market thinks it is: a high-quality payroll/HCM tollbooth with unusually durable economics, but the stock already embeds most of that virtue. The operating record is hard to argue with. Revenue has climbed from $16.5B in 2022 to $21.95B in 2026, a 7.4% four-year CAGR, while operating income rose from $3.72B to $5.32B and net income from $2.95B to $4.41B. That is not financial engineering masking stagnation; margins have improved too, with gross margin at 46.4%, operating margin 24.2%, and net margin 20.1% in 2026. Quarterly numbers show the same pattern: June quarter revenue was $5.47B, up 6.6% from $5.13B a year earlier, and net income rose 7.5% to $978.7M. This is a mature business still compounding at a healthy clip, and the cash conversion is excellent: $5.44B of operating cash flow and $5.24B of free cash flow on $4.41B of net income, with capex of just $196.6M. That is elite for a company of this scale.
What stands out to me is not deterioration but the degree to which the valuation demands that the current machine-like performance continue with almost no wobble. At $271.34, ADP trades at 24.8x earnings, about 5.0x sales, and 18.4x EV/EBITDA. For a business growing revenue 6.9% and earnings 8.5%, that is rich, even allowing for recession resistance and a 2.5% dividend yield. A simple earnings-yield framing makes the point: the stock offers roughly a 4.0% earnings yield against a company whose long-run EPS growth profile appears high-single-digit, not low-teens. That can work for a fortress franchise, but it leaves little room for multiple expansion and not much room for disappointment. I do not see evidence in the raw numbers of a business accelerating into a meaningfully higher growth bracket. The last eight quarters are steady, not inflecting. Revenue moved from $4.83B in September 2024 to $5.94B in March 2026, then back to the seasonally lower $5.47B in June 2026; that is dependable, but it does not justify treating ADP like a scarce growth asset.
The balance sheet and return metrics explain why investors keep paying up. Net debt is minimal, with $4.97B of debt against $4.23B of cash, and the business is so asset-light that ROE of 73.2% and ROIC of 60.6% look almost absurdly strong. Some of that is optical because equity is only $6.03B, but the broader conclusion is still valid: ADP can distribute a lot of cash without stressing the business. A payout ratio near 59.5% is sustainable given FCF, and the low capex burden makes buybacks and dividends structurally easy. That is why I reject the “value trap” framing. Value traps usually show weakening growth, eroding margins, or balance-sheet stress. ADP shows none of those. This is not a trap; it is a premium bond-like equity. My issue is simply that the bond-like premium has become a bit too generous. For a company with mid- to high-single-digit growth, fair value feels closer to 21-23x earnings, which implies roughly $230-$255 rather than $271.
The strongest pushback is obvious and not trivial: quality this consistent rarely gets cheap. If revenue continues to rise 6-7% annually, net margins hold around 20%, and free cash flow remains above $5B, then a mid-20s P/E may be the right clearing price for a mission-critical platform with high switching costs and low cyclicality. The quarter-to-quarter stability supports that view, and the market may reasonably pay a structural premium because ADP’s downside earnings risk is lower than that of typical software companies. The insider tape is not alarming either; there was at least one open-market purchase of 3,619 shares in May 2026, and the rest looks like routine small sales and option activity, not an exodus. If you believe this business can keep compounding earnings near 9% while returning capital reliably, then 24-25x is expensive but not insane. I weigh that argument less heavily because even wonderful companies can be mediocre stocks when bought at full price, and here the present valuation assumes the defensive moat remains intact while growth stays steady. That is a lot to pay for “nothing goes wrong.”
What would change my mind is either price or proof of faster growth. If the stock fell into the low-$240s without a change in fundamentals, I would be much more constructive because the earnings multiple would move closer to 22x for a genuinely excellent franchise. Alternatively, if ADP starts printing something better than the current cadence — say revenue growth reaccelerating above 8% for several quarters, operating margin pushing toward 25-26%, and free cash flow rising decisively above $5.7B-$6.0B — then the current multiple would look more deserved. On the other side, if growth slips toward 4-5% while the multiple stays above 24x, the stock likely derates quickly because the “steady compounder” premium is the whole game here.
Grok Reading
grok-critique step) alongside the other Big-3 seats, when a
report is run on this ticker.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
Revenue has climbed every year from 16.5B (2022) to 21.95B (2026), a ~7.4% CAGR, while gross margin expanded from 42.6% to 46.4% and operating margin from 22.6% to 24.2% - textbook operating leverage on a mature business. Net income grew from 2.95B to 4.41B and FCF from 2.93B to 5.24B, with OCF/NI at 1.17x and accruals at -1.2% of assets, meaning reported earnings are backed by actual cash. Beneish M of -2.63 shows no manipulation signature; the Altman Z of 2.4 (grey) is a quirk of a capital-light service model rather than a distress signal.
Verify before trusting this (4)
- Nature of the 735M net debt and any client-fund float classification in the 10-K
- Segment mix between Employer Services and PEO and any client retention disclosures
- Whether the Swan open-market purchase reflects a broader board pattern or a one-off
- SBC grant vesting schedule versus the 654% buyback coverage sustainability
The composite fair value sits at $198.67 and the signal-adjusted FV at $220.69 against a $271.34 price - implying the stock is 19-27% above deserved value. The anchored-PE of $252 is the most generous read and even that leaves no margin of safety; the DCF at $213 and EPV floor at $115 both say the market is paying a premium for certainty. Earnings quality is high (score 2), so no haircut is warranted - deserved value gets the full quality credit, and it still comes in below the tape.
Verify before trusting this (4)
- Forward organic revenue growth guidance vs the low-teens implied by anchored-PE
- Client funds float sensitivity to rate cuts (a swing factor in FCF)
- Retention rates in the down-market SMB segment where Gusto/Rippling compete
- Buyback pace vs share issuance to confirm net shrink continues
The tape is benign (VIX 14.9, S&P at highs, risk-on regime building) but ADP's low beta of 0.82 and defensive-compounder archetype mean it neither surges with risk-on rallies nor gets marked down hard in stress. The dominant sentiment force here is the narrative: a 'forever hold, quality-at-fair-price' story that is durable but low-intensity and low-cult, meaning it doesn't attract momentum flows nor invite violent de-ratings. That is a small, persistent tailwind that justifies the ~23% premium to DCF the market has been extracting for years. The wrinkle: this week's July jobs report was a shock miss (-23k vs +80k expected), and ADP IS the payroll company - both symbolically and operationally, since employment weakness eventually shows up in pays-per-control and float. Headlines pairing ADP with slowing hiring reinforce a subtle bear read on the SMB franchise just as competitor comparisons (Rippling, Guideline) are being aired. Analyst tone appears neutral-to-constructive with no visible target cut wave. Net: the macro backdrop is fine, the narrative is intact but not exciting, and the news flow leans mildly negative on the labor angle. Pressures roughly cancel.
Verify before trusting this (4)
- Whether analyst targets get trimmed in the next 2 weeks tied to the weak jobs print
- August ADP National Employment Report - a second weak print would harden the SMB-softening narrative
- Any commentary from Rippling/competitors on SMB share gains that could crack ADP's moat story
- Whether the risk-on regime holds or a growth-scare rotation into pure defensives (staples/utilities) leaves ADP behind
This lens hasn't been run for this ticker yet.
When we made this prediction on Aug 8, 2026, ADP was $271.34. We expect it to be $257.00 by Feb 2027, and we consider it great value under $225.00. This is an early model (v0.6.0) — the direction is more reliable than the exact price. Made Aug 8, 2026.
Blue is our prediction, starting the day we made it. Grey is a slower route to the same place — the same destination, taking longer. Black is the actual price, so you can see how we are doing.