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AUTOMATIC DATA PROCESSING INC

Nasdaq: ADP·Roseland, New Jersey·

Price
$263.96
Base IV
$220.23
Your value
$220.23
-16.6%

Valuation snapshot

Above base caseOut of date
$263.96
price
$220.23
base IV/share
Bear $168.17Bull $270.01

Price is between the base and bull cases. Price as of Oct 2, 2026 · Valuation Aug 16, 2026.

Researched byClaude Opus 5

Track record

Reported financials are not available yet.

Why the gap?

At $263.96 the market is pricing AUTOMATIC DATA PROCESSING INC as if revenue grows 9.3% a year. This valuation assumes it grows 5.1% a year. That single disagreement accounts for most of the distance between the two numbers — which makes it the first thing worth auditing.

Implied by price

+9.3%

revenue growth a year, holding everything else researched

Assumed here

+5.1%

researched base case, grounded in filings and guidance

Or, growth held

35.3%

operating margin reproduces the price, vs 29.5% assumed

Many combinations of assumptions reproduce the same price. These are ways to read what the market might expect, not its actual view.

Your valuation

Four judgments stand between the filing and a number. Audit them one at a time and leave with a valuation that is yours.

  • 01 Revenue growth5.5%
  • 02 Operating margin29.5%
  • 03 Risk and beta0.81
  • 04 Long-run growth2.5%
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What drives the base case

All three cases →

ADP grew revenue about 7% to $21.9 billion in fiscal 2026 and lifted profitability for the third straight year, helped by automation and by interest earned on the money it holds for clients. Management has told investors to expect 5-6% growth next year with further profitability gains, and this case takes them at their word. Record new-client signings of $2.2 billion and a 92% client retention rate keep the base compounding, so growth eases only slowly from there rather than falling off. Profit per dollar of sales keeps improving, but by smaller steps each year as the easy automation savings are captured and the lower-margin employee-benefits business grows alongside.

What shapes the assumptions

No structured value drivers are attached to this valuation yet.

How confident is this estimate?

Quality checks
72/100Strong

Some of any gap to the price is model uncertainty rather than real disagreement. Start with the weakest components.

  • Scenario dispersion7.7
  • Terminal-value dependency2.1
  • Historical stability9.1
  • Margin predictability—

Why the number moved

No prior valuation bridge is available yet. Future recalculations will explain what moved.

Explore StockValuer's full research

All cases, evidence, value drivers, sensitivity, quality checks, and calculation detail.

Financials

Reported quarters with derived margins, cash flow, and net cash.

Methodology

How reported facts, researched judgments and deterministic math are kept apart.

Base estimate

$220.23 -16.6%

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