Automatic Data Processing, Inc. (ADP) Stock Analysis 2026

This chart shows how ADP's revenue flows through to profit. Each row deducts a layer of costs: first the direct cost of making products/services (Cost of Revenue), then operating expenses like marketing and R&D, then taxes. What remains at the bottom is net income — the actual profit shareholders own. High gross and net margins indicate a business with strong pricing power and efficiency.

Automatic Data Processing, Inc. trades at a trailing P/E of 26.25x, generates $5.24B in free cash flow, runs a debt/equity ratio of 91.44, and converts shareholder equity into profit at a 72.2% return on equity. For context: P/E ratio measures how much you pay for $1 of earnings (lower = cheaper, but fast-growing companies command higher P/E); Free Cash Flow is the cash left after running the business; Debt/Equity shows how leveraged a company is; Return on Equity shows how efficiently it turns shareholder capital into profit.

15 analysts covering Automatic Data Processing, Inc. currently lean toward a Hold rating, with a mean 12-month price target of $287.27 (+3.5% vs the current price). Analysts set these targets after researching a company's earnings, competitive position, and industry trends — Strong Buy / Buy means the majority expect meaningful upside, while Hold means fair value near the current price rather than a sell signal.

We use 1 valuation model to estimate ADP's intrinsic value. Intrinsic value is what a stock is truly worth based on the company's fundamentals, independent of what the market prices it at today. If multiple models agree the stock is undervalued, that convergence is a stronger signal.

ADP is currently in a golden cross pattern, trading above its 50-day average of $256.91 and above its 200-day average of $236.48. Moving averages smooth out day-to-day volatility to reveal the underlying trend — a Golden Cross (50MA crosses above 200MA) is a classic bullish signal, a Death Cross is bearish, though both are lagging indicators that confirm trends rather than predict them.