ADP
Automatic Data Processing, Inc.
ADP remains a high-quality payroll and HCM compounder, but the current setup still looks closer to Hold than to a wide-gap rerating case.
Live company workspace
This page is the active working surface. It combines the latest price context, filing status, reported fundamentals, refreshed model-base statements, current valuation output, and the scenario workbench. The report page stays separate as the published archival report.
How to read note event vs rating
Note event tells you what changed in the latest published note. Published rating shows the stance after that event.
Both were published Apr 10, 2026.
Current model signal
Sell
Confidence: Medium
Implied return: -12.2 downside
Fair value $194 vs. current $221 (-12.2 downside).
Model vs published view
Current model signal differs from the latest published analyst rating.
Live investment view
Base case stance: Sell with medium confidence as shares are currently being evaluated against an older daily scheduled quote of $221 versus $194 fair value, implying -12.2 downside. This workspace updates with the latest daily scheduled quote and reported inputs, while the published report remains a point-in-time note.
Price basis warning
Current price-dependent output is using a stale scheduled quote. Fair value, upside / downside, and the model signal are still shown, but they should be read with caution until a fresher daily scheduled quote refresh is available.
Current model signal
Sell
Latest note event
New
Published Apr 10, 2026
Current published rating
Hold
Published Apr 10, 2026
Model vs published view
Current model signal differs from the latest published analyst rating.
Daily scheduled refresh
Alpha Vantage GLOBAL_QUOTE
Latest daily scheduled quote is past the freshness window. Daily scheduled refresh as of May 21, 2026, 6:52 AM UTC. Fresh through May 22, 2026, 6:52 AM UTC.
Filing refreshed
4 filed May 11, 2026 | Reporting period May 7, 2026
Filing refreshed Jun 6, 2026, 6:27 AM UTC. Fresh through Jun 6, 2026, 6:27 PM UTC.
Open filing sourceFundamentals refreshed
SEC XBRL companyfacts API
Live SEC companyfacts currently cover revenue and net cash / net debt. Reporting period end 2025-06-30.
Fundamentals refreshed 6 Jun 2026, 06:27 UTC. Fresh through 6 Jun 2026, 18:27 UTC.
Current model signal
Sell
Confidence
Medium
Stale scheduled quote
$221
Fair value
$194
Upside / Downside
-12.2 downside
Top drivers
Payroll and HCM workflows remain mission-critical, supporting retention and durable recurring revenue.
Operating leverage and steady cash generation provide a credible valuation floor.
Top risks
A softer labor market could moderate client growth and payroll-linked revenue more than the base case assumes.
Client-funds and float dynamics make balance-sheet interpretation more nuanced than a simple net-cash read.
Sector / Industry
Industrials
Human Resource & Employment Services
Headquarters
Roseland, NJ
Market Cap
$77B
Current / Fair Value
$221 / $194
Upside / Downside
-12.2 downside
Coverage snapshot
Report updated: Apr 10, 2026
Curated public preview analysis with live price, filing metadata, and reported fundamentals overlays. Full live filing ingestion is not yet enabled.
Coverage currently spans twenty-eight companies: MSFT, NVDA, AAPL, GOOGL, AMZN, META, AVGO, ORCL, AMD, NFLX, V, MA, WMT, PG, JNJ, ADBE, CSCO, TXN, COST, KO, HD, PEP, QCOM, INTU, MCD, ADP, ABT, and IBM.
Model-base financial summary
Current annual model-base range: FY2023 | FY2024 | FY2025
Revenue (Latest FY)
FY2025 | +10.4% vs prior FY
$21.2B
Operating Margin
+104 bps vs prior FY
25.0%
FCF (Latest FY)
21.7% margin | FY2025
$4.6B
Net Cash / (Debt)
Balance-sheet treatment stays conservative around client-funds complexity
($800.0M)
Key ratios
EV / NTM EBITDA
Sector 14.2x
15.8x
P / NTM EPS
Sector 21.0x
19.5x
ROIC
Sector 13.2%
22.5%
Rule of 40
Strong
33%
Base-case assumptions
These are AnalystScope's current base-case valuation inputs. The note under each number explains why that level is considered reasonable for this company; the sensitivity line shows how much fair value moves if that judgment is wrong.
Revenue CAGR (5Y)
6.0%
+/- 1.0% => +/-$5/sh
Why this level: This is AnalystScope's base-case growth assumption, not a guarantee. It sits below the latest FY model-base revenue pace (2025.0%), so the model does not extend current strength too far into the outer years. Current company context: Payroll and HCM workflows remain mission-critical, supporting retention and durable recurring revenue.
Terminal Growth
2.5%
+/- 0.5% => +/-$3/sh
Why this level: This is AnalystScope's mature long-run growth assumption, not a perpetual hypergrowth claim. At 2.5%, it sits well below the 6.0% five-year revenue CAGR, so the model steps down from the explicit forecast period to a steadier long-run pace. For Automatic Data Processing, Inc., that means a durable franchise can keep compounding after year five without assuming today's faster growth profile lasts indefinitely.
WACC
8.1%
+/- 0.5% => -$5/sh
Why this level: This is AnalystScope's base-case cost-of-capital judgment, not a precise CAPM output. It reflects the current rates backdrop, equity risk premium, and the company's balance-sheet posture. Balance-sheet treatment stays conservative around client-funds complexity
Operating Margin (Year 5)
25.5%
+/- 100 bps => +/-$4/sh
Why this level: This is AnalystScope's base-case margin view, not a promise of straight-line expansion. It keeps year-five margins close to today's model-base operating margin (25.0%), which implies the current margin structure is broadly durable. Margin input keeps the base on durable software-and-services economics rather than temporary expense timing.
How to read the assumptions and sensitivities
These are base-case assumptions used to estimate fair value. They are reasonable model inputs, not reported facts.
Each sensitivity line shows the estimated fair-value-per-share change from a small move in that one input while the other inputs stay fixed.
bps means basis points. 100 bps equals 1.00 percentage point.
WACC sensitivity moves in the opposite direction because a higher discount rate lowers present value, while a lower discount rate raises it.
Scenario workbench
Analyst workbench
This is a private working layer, not the published AnalystScope base case or report view. It keeps the published base case as the anchor, applies bounded changes to the four core valuation inputs, and updates the fair-value estimate immediately.
Saved scenarios currently stay local to this browser for ADP. Base-case rationale remains in the assumptions section above. Scenario output now reprices the published valuation methods from projected operating anchors when those anchors are available, while keeping market-multiple and capital-structure assumptions anchored to the published AnalystScope framework.
Editable assumptions
Adjust the inputs within the displayed plausible range for this company. The workbench stays anchored to the published base case.
This is a bounded scenario tool, not a free-form spreadsheet. Values outside the displayed range snap back to the nearest allowed value when you leave the field.
Matches the published AnalystScope base case.
Revenue CAGR (5Y)
Published base case: 6.0% | +/- 1.0% => +/-$5/sh
Allowed range: 0.0% to 12.0%
Terminal Growth
Published base case: 2.5% | +/- 0.5% => +/-$3/sh
Allowed range: 1.0% to 4.0%
WACC
Published base case: 8.1% | +/- 0.5% => -$5/sh
Allowed range: 6.1% to 10.1%
Operating Margin (Year 5)
Published base case: 25.5% | +/- 100 bps => +/-$4/sh
Allowed range: 17.5% to 33.5%
Private saved scenarios
Save up to 5 named scenarios for ADP. They never overwrite the published AnalystScope base case and remain clearly separate from public research.
Checking private workspace session...
Private scenario note
Keep a short thesis, main risk, or why this case differs from the published base case.
0 / 280
Notes stay local to this browser unless you sign in to the private workspace, and they never appear as published AnalystScope research.
No private scenarios saved yet. Make a change to the published base case, then save a named scenario here.
Published base case
Fair value
$194
Upside / Downside
-12.2 downside
Model signal
Sell
Published base-case output
Scenario output reprices the published DCF and multiple methods from projected year-5 revenue, margin, free cash flow, EBITDA, and EPS anchors. Market multiples and capital structure stay anchored to the published base framework.
Fair value
$194
$0/sh vs published base case
Upside / Downside
-12.2 downside
+0.0 pts vs published base case
Model signal
Sell
Unchanged versus the published base case.
Method movement inside the scenario
This breakdown shows what moved inside the published valuation framework when you edit the scenario. The published AnalystScope base case stays anchored, and any method without a clean projected anchor remains pinned to that framework.
Method rows below reflect the current edited scenario state, not just the saved scenario snapshots.
Influence tags are directional rather than exact attribution. They estimate which edited input is moving each method most by reverting one assumption at a time while the other edited inputs stay in place.
| Method | Published base | Edited scenario | Delta | How it moved / main drivers |
|---|---|---|---|---|
DCF (Base) DCF-style | 45% weight | $190 | $190 | $0/sh | Base-aligned This method is supported by the model-native bridge and currently stays aligned with the published base case. Edited inputs are largely offsetting each other, so this row stays close to the published base case. |
NTM P/E Multiple P/E-style | 35% weight | $198 | $198 | $0/sh | Base-aligned This method is supported by the model-native bridge and currently stays aligned with the published base case. Edited inputs are largely offsetting each other, so this row stays close to the published base case. |
EV/EBITDA Cross-check EV-based multiple | 20% weight | $195 | $195 | $0/sh | Base-aligned This method is supported by the model-native bridge and currently stays aligned with the published base case. Edited inputs are largely offsetting each other, so this row stays close to the published base case. |
Weighted fair value Published framework result | Published framework result | $194 | $194 | -$0/sh | Moved Combines the repriced method outputs using the published AnalystScope weights. No single edited assumption is dominating this move in a material way. |
Published base case vs private scenarios
Compare the published AnalystScope base case against your saved private scenarios in one view. Saved scenarios remain local to this browser, and the table below reflects saved snapshots rather than any unsaved edits currently sitting in the editor.
Fair-value comparisons use the same workbench recalculation path as the editor above.
Published base case stays pinned as the anchor row.
| Scenario | Revenue CAGR (5Y) | Terminal Growth | WACC | Op. Margin (Y5) | Fair Value | Upside / Downside | Model Signal | Delta vs Base | Action |
|---|---|---|---|---|---|---|---|---|---|
AnalystScope base case PublishedOfficial AnalystScope anchor row. | 6.0% | 2.5% | 8.1% | 25.5% | $194 | -12.2 downside | Sell | Published anchor |
Model-base financial statements
AnalystScope annual model-base statements in USD across FY2023 | FY2024 | FY2025.
Income statement
| Line item | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Revenue | $18.0B | $19.2B | $21.2B |
| Gross Profit | $8.2B | $8.9B | $9.9B |
| Operating Income | $4.0B | $4.6B | $5.3B |
| EBITDA | $4.4B | $5.1B | $5.8B |
| Net Income | $3.3B | $3.7B | $4.2B |
Balance sheet
| Line item | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Cash & Investments | $2.6B | $2.8B | $3.0B |
| Total Debt | $4.2B | $4.0B | $3.8B |
| Net Cash / (Debt) | ($1.6B) | ($1.2B) | ($800.0M) |
| Total Assets | $52.0B | $55.0B | $58.0B |
| Total Liabilities | $45.0B | $47.6B | $50.0B |
| Shareholders' Equity | $7.0B | $7.4B | $8.0B |
Cash flow
| Line item | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Operating Cash Flow | $4.1B | $4.5B | $5.0B |
| Depreciation & Amortization | $400.0M | $500.0M | $500.0M |
| Capital Expenditures | ($300.0M) | ($300.0M) | ($400.0M) |
| Free Cash Flow | $3.8B | $4.2B | $4.6B |
Model base vs reported fundamentals
Side-by-side view of the latest live reported fundamentals versus the current AnalystScope model base used in public valuation and thesis work.
Reported numbers show the latest company print. Model base is the comparable operating base AnalystScope uses for valuation work, which can include standardization, conservative balance-sheet treatment, working-capital cleanup, and through-cycle adjustments when current reported figures do not look durable.
Reported fundamentals source
SEC XBRL companyfacts API
Live SEC companyfacts currently cover revenue and net cash / net debt. Reporting period end 2025-06-30.
Fundamentals refreshed 6 Jun 2026, 06:27 UTC. Fresh through 6 Jun 2026, 18:27 UTC.
Model-base impact on the thesis
For ADP, the model base is intended to capture durable payroll and HCM economics while being conservative around client-funds and timing noise.
Model-base diagnostics
Latest model base FY2025 versus the current live reported snapshot where available.
Income statement
Revenue
FY2025 $21.2B vs reported TTM $20.6B (+3.1%)
Balance sheet
Net cash / (debt)
FY2025 Net debt $800.0M vs reported Net debt $767.1M
| Metric | Live reported | Status | Model base | Status |
|---|---|---|---|---|
| Revenue (TTM) | $20.6B | Live reported | $21.2B +10.4% YoY Adjustment: Model revenue smooths client employment growth and implementation timing rather than extrapolating one payroll cycle or labor print. | Model base |
| Operating Margin | Unavailable | Unavailable | 25.0% +104 bps YoY Adjustment: Margin input keeps the base on durable software-and-services economics rather than temporary expense timing. | Model base |
| FCF (TTM) | Unavailable | Unavailable | $4.6B 21.7% margin Adjustment: FCF input adjusts for working-capital timing and avoids overstating cash generation from short-term float effects. | Model base |
| Net Cash / (Debt) | ($767.1M) | Live reported | ($800.0M) Balance-sheet treatment stays conservative around client-funds complexity Adjustment: Balance-sheet treatment stays conservative around client funds and does not present that float as straightforward distributable net cash. | Model base |
Reported vs durable model base
How to read this
Reported = the latest company-reported figure. Model base = AnalystScope's comparable operating base used for valuation and thesis work. It may include standardization, conservative balance-sheet treatment, working-capital cleanup, and through-cycle adjustments when current reported numbers do not look durable.
This is an analyst model base, not a claim of perfect adjusted truth. Larger gaps can reflect deliberate cyclical or base-case adjustments, not just light accounting cleanup.
Why the model base differs
For ADP, the model base is intended to capture durable payroll and HCM economics while being conservative around client-funds and timing noise.
Rows are sorted by largest comparable adjustment first.
| Metric | Model base | Live reported | Variance vs reported | Adjustment size | Why lower / higher? |
|---|---|---|---|---|---|
Revenue (TTM) | $21.2B FY2025 model base | $20.6B Live reported TTM | +$600.0M / +3% | Close to reported | Model base is higher than live reported because the thesis does not assume the latest reported softness is the durable revenue run-rate. It smooths client employment growth and implementation timing rather than extrapolating one payroll cycle or labor print. |
Net Cash / (Debt) | ($800.0M) FY2025 model base | ($767.1M) Live reported balance sheet | -$32.9M / 0% of revenue | Close to reported | Model base is more conservative than the live reported balance-sheet figure. It stays conservative around client funds and does not present that float as straightforward distributable net cash. |
Operating Margin | 25.0% FY2025 model base | Unavailable Live reported margin | Unavailable | Unavailable | AnalystScope keeps a separate model base when the latest reported figure is unavailable or not directly comparable. It keeps the base on durable software-and-services economics rather than temporary expense timing. |
FCF (TTM) | $4.6B FY2025 model base | Unavailable Live reported TTM | Unavailable | Unavailable | AnalystScope keeps a separate model base when the latest reported figure is unavailable or not directly comparable. It adjusts for working-capital timing and avoids overstating cash generation from short-term float effects. |
Ratios + trends
Annual model-base income-statement, cash-flow, and balance-sheet metrics, plus cross-statement quality relationships with compact prior-FY direction cues, derived from the curated statement backbone.
Basis: FY2023 | FY2024 | FY2025. Live reported fundamentals remain available in the reconciliation section.
Operating and cash-flow trends
Revenue growth (1Y)
+10.4%
Gross margin
46.7%
Operating margin
25.0%
Operating margin change vs prior FY
+1.0 pts
EBITDA margin
27.4%
EBITDA margin change vs prior FY
+0.8 pts
Operating income growth (1Y)
+15.2%
Net margin
19.8%
FCF margin
21.7%
FCF margin change vs prior FY
-0.2 pts
FCF growth (1Y)
+9.5%
Balance sheet quality
Cash & investments
$3.0B
Total debt
$3.8B
Net cash / (debt)
Net debt $800.0M
Net cash / (debt) as % of revenue
Net debt 3.8% of revenue
Liabilities / assets
vs FY2024 (-0.3 pts)
86.2%
Cross-statement quality
Gross-to-operating spread
21.7 pts
Operating cash flow / net income
vs FY2024 (-0.0x)
1.2x
Operating cash flow / EBITDA
vs FY2024 (-0.0x)
0.9x
Free cash flow / net income
vs FY2024 (-0.0x)
1.1x
CapEx as % of revenue
vs FY2024 (+0.3 pts)
1.9%
CapEx as % of operating cash flow
vs FY2024 (+1.3 pts)
8.0%
CapEx / D&A
vs FY2024 (+0.2x)
0.8x
Cash & investments / total debt
vs FY2024 (+0.1x)
0.8x
Shareholders' equity as % of revenue
37.7%
Asset turnover
vs FY2024 (+0.0x)
0.4x
Financial diagnostics
Compact model-base diagnostics for analyst triage, highlighting where the durable valuation base is diverging most clearly from the latest reported picture.
Revenue momentum
Improving+10.4% latest 1Y growth
vs +6.7% prior 1Y
Operating margin trend
Improving25.0% latest margin
+104 bps vs prior FY
FCF margin trend
Stable21.7% latest FCF margin
-18 bps vs prior FY
Balance-sheet posture
StableNet debt 3.8% of revenue
vs Net debt 6.3% of revenue prior FY
Thesis scorecard
Qualitative scorecard of the main thesis dimensions behind the current investment view.
Growth
ModerateRecurring payroll and HCM demand supports steady growth, though not a high-velocity profile.
Profitability
StrongScale and retention support durable operating leverage.
Balance sheet
ModerateThe balance sheet is manageable, but client-funds complexity warrants conservative treatment.
Valuation
ModerateThe recent drawdown helps, but the valuation spread still looks contained.
Execution / Resilience
StrongPayroll mission-criticality and retention support resilience.
Key drivers
Payroll and HCM workflows remain mission-critical, supporting retention and durable recurring revenue.
Operating leverage and steady cash generation provide a credible valuation floor.
The current multiple is more reasonable than prior highs, but still not cheap enough to force a harder rating.
Key risks
A softer labor market could moderate client growth and payroll-linked revenue more than the base case assumes.
Client-funds and float dynamics make balance-sheet interpretation more nuanced than a simple net-cash read.
If margin progression slows while the multiple stays firm, the upside case would narrow.
What would change our view
A wider discount to fair value would make the workflow-quality story more attractive.
Stronger evidence of durable HCM cross-sell and client growth would improve conviction.
If labor-market softness persists and cash conversion weakens, the current Hold stance would deteriorate.
Near-term catalysts
Client-retention, pays-per-control, and HCM attach commentary remain the clearest near-term drivers.
Margin flow-through matters more than a single quarter of payroll-volume noise in this setup.
Any clearer read on labor-market resilience would help frame the current revenue base.
What we are watching
Whether client growth and retention stay solid through a softer labor backdrop.
How much current cash conversion is structural versus influenced by float and timing effects.
Whether HCM mix is strengthening enough to offset any slower payroll-volume growth.
Coverage metadata
How to read note event vs rating
Note event tells you what changed in the latest published note. Published rating shows the stance after that event.
Both were published Apr 10, 2026.
Report updated
Apr 10, 2026
Coverage status
Active coverage
Latest note event
New
Apr 10, 2026
Current published rating
Hold
Apr 10, 2026
Analyst note
Watching labor-market sensitivity, client retention, and whether cash conversion remains durable after float-related normalization.
Model vs published view
Current model signal differs from the latest published analyst rating.
Coverage timeline
Timeline events show published note events and the rating that followed each event. The current model signal is shown separately above.
Apr 10, 2026
Started coverage with a Hold view on recurring payroll economics and a still-contained spread to fair value.
Bull / Base / Bear scenarios
Bull case
$207
Normalized support: Growth, margin, and cash-flow trends are supportive of the upside case.
Base case
$194
Normalized support: Current margin, cash-generation, and balance-sheet profile support the base case.
Bear case
$177
Downside protection: Cash generation and balance-sheet support are mixed in the bear case.
Why this rating
The stock is currently being evaluated against $221 versus a base-case fair value of $194, implying -12.2 downside. That supports a Sell rating with Medium confidence under the current model.
Stale scheduled quote
$221
Fair value
$194
Upside / Downside
-12.2 downside
Model signal / Confidence
Sell / Medium
Confidence framing
Method agreement / dispersion
Valuation methods are tightly grouped, with implied values ranging from $190 to $198.
Margin strength
Operating margin is 25.0%, with +104 bps vs prior FY.
Balance sheet position
Balance sheet positioning currently reflects net debt of ($800.0M), with balance-sheet treatment stays conservative around client-funds complexity.
Valuation methods
| Method | Implied Value | Weight |
|---|---|---|
| DCF (Base) | $190 | 45% |
| NTM P/E Multiple | $198 | 35% |
| EV/EBITDA Cross-check | $195 | 20% |
Buy / Hold / Sell output
Current model recommendation
Sell
Price: $221
Fair value: $194
Implied upside / downside: -12.2 downside
Current published rating: Hold on Apr 10, 2026
Model vs published view
Current model signal differs from the latest published analyst rating.
The displayed rating is anchored to the base-case fair value. Buy is assigned at 8% or greater implied upside, Hold between -10% and +8%, and Sell at -10% or worse, with borderline calls cross-checked against normalized operating, cash-generation, and balance-sheet support. Confidence reflects valuation dispersion, operating margin profile, and balance-sheet strength.
What changed section
2026-04-10
Added to AnalystScope coverage
Impact: New Hold view on durable payroll-and-HCM economics
2026-04-10
Kept balance-sheet treatment conservative
Impact: Avoids overstating support from client-funds-related cash balances