Automatic Data Processing, Inc. (ADP) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

+0.9%

$302.99

vs $300.18 price

Levered DCF

$365.31

After debt service

Piotroski score

6 / 9

Average

Altman Z-score

2.49

Grey zone

Rating

B+

Overall 3 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2026	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019
P/E	20.41×	30.78×	25.78×	26.64×	29.84×	32.56×	25.98×	31.57×
P/B	14.83×	20.29×	21.28×	25.91×	27.27×	14.93×	11.15×	13.4×
P/S	4.08×	6.11×	5.04×	5.05×	5.33×	5.64×	4.4×	5.11×
EV / EBITDA	14.03×	21.03×	16.82×	17.6×	20.43×	21.73×	17.13×	20.51×
Gross margin	48.2%	50.8%	49.9%	48.9%	46.9%	46.5%	46.0%	46.7%
Operating margin	18.6%	26.3%	25.7%	25.0%	23.1%	22.2%	21.5%	21.2%
Net margin	20.1%	19.8%	19.5%	18.9%	17.9%	17.3%	16.9%	16.2%
Current ratio	0.17×	1.05×	1.01×	0.99×	0.99×	1.07×	1.05×	1.05×
Debt / equity	0.87×	1.46×	0.81×	0.98×	1.08×	0.59×	0.41×	0.42×
Interest coverage	8.88×	11.87×	13.51×	17.49×	44.07×	55.69×	29.33×	23.13×
Dividend yield	2.9%	1.9%	2.3%	2.1%	1.9%	1.9%	2.3%	1.8%
Payout ratio	59.5%	58.8%	58.2%	55.8%	56.3%	60.6%	59.6%	56.4%

Key metrics by fiscal year

Metric	FY2026	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019
Return on equity	73.2%	65.9%	82.5%	97.2%	91.4%	45.8%	42.9%	42.5%
Return on invested capital	23.9%	24.7%	39.4%	41.7%	36.6%	24.0%	24.2%	24.1%
Return on assets	7.0%	7.6%	6.9%	6.7%	4.7%	5.3%	6.3%	5.5%
Free cash flow yield	5.9%	3.8%	3.7%	4.0%	2.9%	3.1%	3.8%	2.9%
Earnings yield	4.9%	3.2%	3.9%	3.8%	3.4%	3.1%	3.8%	3.2%
Enterprise value	$90.5B	$131.3B	$97.6B	$92.3B	$90B	$85.4B	$64.6B	$72.7B
Net debt / EBITDA	0.16×	0.92×	0.14×	0.26×	0.47×	0.2×	0.12×	0.09×
Cash conversion cycle (days)	53	57	61	57	66	60	56	57