Automatic Data Processing, Inc. (ADP)

FairStock Score: 54/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for durable businesses that earn cash through thick and thin, and ADP is a good example. It provides cloud-based payroll, HR, and PEO services, work that is recurring and deeply embedded in employers' operations. The filed numbers show steady progress: fiscal 2026, the year ended 2026-06-30, revenue was $21.9B, net income $4.4B, and diluted EPS $10.94; fiscal 2025, the year ended 2025-06-30, revenue was $20.6B, net income $4.1B, and EPS $9.98; fiscal 2024, the year ended 2024-06-30, revenue was $19.2B, net income $3.8B, and EPS $9.10. In fiscal Q3 2026, the quarter ended 2026-03-31, revenue was $5.9B, net income $1.4B, and diluted EPS $3.38. FairStock's calculated score is 61/100, and its Lynch category is STALWART, based on 11.2% yearly profit growth over five years and 7.9% revenue growth. Financial health is mixed: FairStock calculates ROE of 72.24% and trailing twelve-month FCF of $4.8B, but D/E is 0.91, ROCE is 6.25%, Altman Z is 1.95, and Piotroski is 5/9. At the $275.90 close on 2026-10-13, FairStock's P/E is 25.24, P/B 18.20, PEG 3.38, EV/EBITDA 16.33, FCF yield 4.4%, and dividend yield 2.51%. FairStock's Graham Number is $61.06, giving a -351.85% margin of safety. That tells me the business is quality but the price is full; growth around mid-single digits may not justify such a premium.

In plain English: ADP provides payroll and human-resources software and services to employers. The business looks strong: it produces steady sales and profits, lots of free cash, and dividends, while customers generally stay with it. At the recent stock price, though, the shares look expensive compared with its reported profits and asset value, so the price already assumes continued steady growth.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q3 2026 10-Q (period ended 2026-03-31) · fiscal Q2 2026 10-Q (period ended 2025-12-31) · fiscal Q1 2026 10-Q (period ended 2025-09-30) · fiscal Q3 2025 10-Q (period ended 2025-03-31) · FY2026 10-K (period ended 2026-06-30) · FY2025 10-K (period ended 2025-06-30) · FY2024 10-K (period ended 2024-06-30)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer