PAYC vs ADP: Paycom vs ADP Stock Comparison: AI Score, Valuation, Performance and Upside
Paycom is a pure-play HCM SaaS company targeting US midmarket businesses with a differentiated single-database platform and Beti employee self-service payroll, while ADP is the world's largest payroll and HR company serving businesses of all sizes globally. Paycom offers faster near-term growth; ADP offers global scale, float income, and unmatched switching cost durability.
PAYC vs ADP is pure-play US midmarket HCM SaaS with Beti differentiation versus the world's most entrenched payroll and HR compounder — Paycom wins if Beti retention sustains pricing and new client adds recover; ADP wins if global payroll entrenchment, float income, and PEO growth compound consistently.
PAYC holds the edge across 3 of 5 key metrics in this comparison. PAYC leads on both 1-year return (+26.75%) and forward P/E quality (16.63x vs 20.02x for ADP), a relatively favorable combination of momentum and valuation. PAYC leads on both revenue growth (9.80%) and operating margin (31.72%), suggesting a stronger fundamental setup on both dimensions. Analyst consensus implies meaningfully more upside for ADP (+7.21%) than for PAYC (-5.16%).
Human Wall Street analysts' price targets, typically implying a ~12-month view — a separate signal from this site's own AI Prediction Signal further down the page, which is a 5-/30-day machine-learning forecast based on price history alone.
- want pure-play HCM SaaS exposure with differentiated Beti employee self-service payroll
- prefer a single-database architecture that reduces integration complexity vs multi-system competitors
- value Paycom's strong operating margins as evidence of pricing power in the midmarket
- believe Beti's efficiency differentiation will drive net new client wins over ADP
- prefer the world's most trusted payroll brand with deep switching costs across businesses of all sizes
- value float income as a significant NII contributor that benefits from higher interest rates
- want global HCM exposure across 140 countries that Paycom's US-focused model cannot match
- prefer a steady dividend-paying compounder over a faster-growing but more volatile SaaS business
| Metric | PAYC | ADP |
|---|---|---|
| AI scorei | 45.8 | 51.4 |
| AI ranki | #707 | #430 |
| Latest closei | $252.87 | $285.65 |
| 1M returni | +11.51% | +3.30% |
| 3M returni | +68.04% | +11.34% |
| 6M returni | +101.44% | +42.55% |
| 1Y returni | +26.75% | +0.51% |
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | PAYC | ADP |
|---|---|---|
| 1Y ago | $12.61K (+26.1%) started 2025-10-16 | $10.2K (+2.0%) started 2025-10-16 |
| 5Y ago | $5K (-50.0%) started 2021-10-18 | $15.58K (+55.8%) started 2021-10-18 |
| 10Y ago | $52.27K (+422.7%) started 2016-10-17 | $47.81K (+378.1%) started 2016-10-17 |
Hypothetical — past performance does not guarantee future results.
| Metric | PAYC | ADP |
|---|---|---|
| Market capi | $10.47B | $106.57B |
| Trailing P/Ei | 24.57 | 24.50 |
| Forward P/Ei | 16.63 | 20.02 |
| Price/Salesi | 7.78 | 6.57 |
| EV/Revenuei | 5.17 | 4.91 |
| Analyst targeti | $220.24 | $287.60 |
| Target upsidei | -5.16% | +7.21% |
| Metric | PAYC | ADP |
|---|---|---|
| Revenue growthi | 9.80% | 6.80% |
| Earnings growthi | 48.10% | 9.80% |
| EPS growthi | +48.10% | +9.80% |
| FCF margini | +19.79% | +23.89% |
| Operating margini | 31.72% | 23.46% |
| Profit margini | 22.78% | 20.11% |
| ROIC proxyi | 41.09% | 72.24% |
| Return on equityi | 41.09% | 72.24% |
| Dividend yieldi | 0.65% | 2.54% |
| Payout ratioi | 15.87% | 60.69% |
| Dividend growth streaki | No increase yet | No increase yet |
| Betai | 0.83 | 0.83 |
| Debt/equityi | 171.97 | 91.44 |
| Current ratioi | 1.07 | 1.05 |
| Quick ratioi | 0.08 | 0.15 |
Over the past year, PAYC and ADP have moved moderately in the same direction (correlation of 0.67), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | PAYC | ADP |
|---|---|---|---|
| 1Y | Growthi | +26.13% | +1.96% |
| CAGRi | +26.18% | +1.96% | |
| Volatilityi | 47.66% | 27.73% | |
| Sharpe ratioi | 0.63 | 0.05 | |
| Sortino ratioi | 1.03 | 0.07 | |
| Max drawdowni | 45.09% | 33.52% | |
| Current drawdowni | 0.00% | 0.64% | |
| Avg drawdowni | 24.66% | 14.45% | |
| Ulcer Indexi | 28.37% | 17.14% | |
| Max daily dropi | 10.72% | 6.58% | |
| Max wkly dropi | 13.33% | 10.27% | |
| 5Y | Growthi | -50.76% | +44.53% |
| CAGRi | -13.23% | +7.65% | |
| Volatilityi | 46.28% | 22.89% | |
| Sharpe ratioi | -0.16 | 0.24 | |
| Sortino ratioi | -0.22 | 0.34 | |
| Max drawdowni | 79.16% | 42.23% | |
| Current drawdowni | 53.62% | 12.59% | |
| Avg drawdowni | 55.65% | 11.51% | |
| Ulcer Indexi | 57.66% | 14.95% | |
| Max daily dropi | 38.49% | 9.20% | |
| Max wkly dropi | 39.26% | 12.17% | |
| 10Y | Growthi | +415.07% | +292.14% |
| CAGRi | +17.82% | +14.65% | |
| Volatilityi | 45.38% | 24.82% | |
| Sharpe ratioi | 0.50 | 0.50 | |
| Sortino ratioi | 0.70 | 0.70 | |
| Max drawdowni | 79.16% | 42.23% | |
| Current drawdowni | 53.62% | 12.59% | |
| Avg drawdowni | 32.33% | 8.60% | |
| Ulcer Indexi | 41.81% | 12.35% | |
| Max daily dropi | 38.49% | 15.25% | |
| Max wkly dropi | 39.26% | 22.45% |
| Category | PAYC | ADP |
|---|---|---|
| Company | Paycom Software, Inc. | Automatic Data Processing, Inc. |
| Sector | Technology | Technology |
| Industry | Software - Application | Software - Application |
| Core business | Cloud-based human capital management (HCM) software for medium-to-large businesses. Paycom's Beti product enables employees to manage their own payroll data, reducing HR errors and administrative burden. Paycom competes against ADP and Workday in the US midmarket. | Largest payroll and HCM provider in the world, serving businesses of all sizes across 140 countries. ADP's Employer Services and Professional Employer Organization (PEO) segments provide payroll, benefits administration, tax filing, and compliance services. |
| Investor focus | Beti adoption driving retention and upsell, client count growth, revenue per client, and operating margin sustainability. | New business starts and hiring data, ES and PEO segment margin, Lyric HCM next-gen platform adoption, and employer funds float income. |
- Beti's employee self-service payroll is a genuinely differentiated product that reduces HR administrative errors by shifting data entry to employees
- Single database architecture means all HCM modules share one data source, reducing errors vs competitor multi-system integrations
- Strong operating margins demonstrate pricing power in the midmarket HCM segment
- ADP is the trusted payroll brand for businesses worldwide — switching away from ADP is painful due to compliance, tax, and benefits administration complexity
- Employer Services float income from holding employee tax payments provides significant NII in higher-rate environments
- PEO segment serves small businesses through co-employment, providing recurring, high-retention revenue with compliance management embedded
- Paycom's revenue growth has slowed as Beti's efficiency gains actually reduce per-employee processing costs — good for customers, challenging for revenue growth
- ADP, Workday, and Ceridian Dayforce compete aggressively in the midmarket
- Geographic concentration in the US midmarket limits addressable market vs global enterprise HCM players
- ADP's growth is modestly paced — it is a stable compounder, not a high-growth software business
- Lyric next-gen HCM platform must succeed to maintain competitiveness vs Workday in the enterprise segment
- New business starts and payroll employment data directly affect ADP's revenue — economic slowdowns reduce new customer growth
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