PAYC vs ADP Stock Comparison: AI Score, Valuation, Performance and Upside
Paycom is a smaller, faster-growing challenger built on a modern single-database HCM platform targeting mid-sized businesses, while ADP is the established, diversified payroll and HR services leader with massive scale across companies of all sizes. Paycom offers more growth potential if it continues taking share with its automation-focused platform, while ADP offers steadier, dividend-supported cash flow from a dominant market position. The choice depends on whether an investor prioritizes growth potential or scale and stability in payroll and HR technology.
Use this comparison to weigh a smaller, faster-growing HCM software challenger (Paycom) against the large, diversified, dividend-paying payroll incumbent (ADP).
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 exposure to a modern, single-database HCM software platform with room to keep taking share
- Are comfortable with a smaller-cap stock whose growth rate has moderated from earlier highs
- Value high revenue retention as a sign of platform stickiness
- Are less focused on current dividend income and more on growth potential
- Want exposure to the largest, most established payroll and HR services provider
- Value a long track record of dividend growth and consistent cash flow
- Prefer diversified revenue across client sizes and service lines
- Are comfortable with more moderate growth in exchange for lower business risk
| 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 | Paycom provides a single-database, cloud-based human capital management platform covering payroll, HR, talent acquisition, and workforce management for mid-sized U.S. businesses. | ADP is one of the largest payroll and human capital management services providers globally, serving businesses of all sizes with payroll processing, benefits administration, and HR outsourcing. |
| Investor focus | Investors watch new client bookings growth, retention rates, and adoption of automation features like its employee self-service payroll tools that reduce administrative labor. | Investors focus on steady bookings growth, retention rates, employment and wage trends that drive its pays-per-control metric, and margin expansion across its Employer Services and PEO segments. |
- Single-database architecture differentiates it from competitors that stitch together acquired point solutions
- High historical revenue retention rates reflect sticky, mission-critical payroll and HR relationships
- Automation-focused product features aim to reduce customer administrative costs and drive upsell
- Massive scale and long operating history provide deep client relationships across businesses of all sizes
- Diversified revenue across payroll, benefits, HR outsourcing, and professional employer organization services
- Consistent free cash flow generation supports a long track record of dividend increases
- Revenue growth has decelerated from its earlier hypergrowth years as the mid-market segment matures
- Smaller scale and narrower target market than the largest payroll processors
- Competitive pressure from both legacy incumbents and newer HCM software entrants
- Growth is more moderate given its already-large scale, making it more sensitive to broader employment trends
- Faces competition from both modern cloud-native HCM platforms and other established payroll processors
- Client fund interest income, a meaningful profit contributor, is sensitive to interest rate changes
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