ADP
Automatic Data Processing · Industrials · Human Resource & Employment Services
$273.81
52w 188.16 – 288.00
20y monthly, adjusted
Mkt cap
$108.8B
P/E
23.8
P/FCF
19.3
FCF yield
5.2%
ROE
73.2%
Shldr yield
4.5%
div 2.5% + bb 2.0%
What today's price assumes
At $108.8B, the market is pricing in 7.2% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew 11.1% per year — expectations look undemanding relative to history.
Simple DCF per-share range: $209 · $352 · $439 (4% / base / optimistic growth). An estimate, not a target.
Historical multiple lens
At its own median P/OCF of 17.3× across 19 years, ADP would trade near $237/share (25th–75th percentile: $163–$315); it trades at 20.0× today.
Assumes the historical multiple regime persists — re-ratings can be permanent.
Growth record
Compound annual growth rates from as-filed 10-K data, split-adjusted
Rev 3y
+6.8%
Rev 5y
+7.9%
Rev 10y
+6.5%
EPS 5y
+12.5%
EPS 10y
+12.9%
FCF 5y
+12.0%
FCF 10y
+11.1%
Fundamentals
Fiscal 2008–2026, from SEC filings
Revenue
Net income
Free cash flow
Diluted shares (lower is better)
Margins
Capital returned (dividends + buybacks)
Cash vs long-term debt
Quarterly
Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.
Revenue by quarter
Net income by quarter
| Quarter | Revenue | YoY | Net income | YoY | EPS | OCF |
|---|---|---|---|---|---|---|
| Q4'26 * | $5.5B | +6.8% | $978.7M | +7.5% | 2.45 | $1.4B |
| Q3'26 | $5.9B | +7.0% | $1.4B | +8.8% | 3.38 | $2.2B |
| Q2'26 | $5.4B | +6.2% | $1.1B | +10.3% | 2.62 | $1.1B |
| Q1'26 | $5.2B | +7.1% | $1.0B | +5.9% | 2.49 | $642.3M |
| Q4'25 * | $5.1B | +7.5% | $910.7M | +9.8% | 2.23 | $1.4B |
| Q3'25 | $5.6B | +5.7% | $1.2B | +5.5% | 3.06 | $1.5B |
| Q2'25 | $5.0B | +8.1% | $963.2M | +9.7% | 2.35 | $1.2B |
| Q1'25 | $4.8B | +7.1% | $956.3M | +11.3% | 2.34 | $824.4M |
| Q4'24 * | $4.8B | +6.5% | $829.3M | +6.8% | 2.01 | $1.3B |
| Q3'24 | $5.3B | +6.6% | $1.2B | +13.6% | 2.88 | $1.5B |
| Q2'24 | $4.7B | +6.3% | $878.4M | +8.0% | 2.13 | $1.0B |
| Q1'24 | $4.5B | +7.0% | $859.4M | +10.3% | 2.08 | $326.5M |
| Q4'23 * | $4.5B | +8.5% | $776.8M | +24.2% | 1.88 | $1.2B |
Track record
Compound annual growth by period. For debt and share count, negative is the good direction.
| Series | 3y | 5y | 10y | 15y |
|---|---|---|---|---|
| Revenue | +6.8% | +7.9% | +6.5% | +5.5% |
| Operating cash flow | +8.9% | +12.0% | +11.1% | +8.0% |
| Free cash flow | +8.9% | +12.0% | +11.1% | +8.0% |
| EPS (diluted) | +10.0% | +12.5% | +12.9% | +10.3% |
| Equity | +19.8% | +1.2% | +3.0% | +0.0% |
| LT debt | +18.4% | +10.7% | +9.5% | +38.6% |
| Diluted shares | −1.0% | −1.2% | −1.3% | −1.4% |
| Stock price | +10.2% | +6.3% | +14.6% | +15.2% |
$100, 3 years ago
$134vs $192 in SPY
10.2% vs 24.4%/yr
$100, 5 years ago
$136vs $181 in SPY
6.3% vs 12.6%/yr
$100, 10 years ago
$389vs $428 in SPY
14.6% vs 15.6%/yr
$100, 15 years ago
$838vs $803 in SPY
15.2% vs 14.9%/yr
The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)
Last 5 years
$3.45
$27.0B created / $7.8B retained
Last 10 years
$5.99
$74.6B created / $12.5B retained
Quality & capital discipline
Cash-based returns and how management deploys capital
Cash ROIC
49.5%
OCF ÷ (equity + debt)
OCF / EV yield
5.2%
MC vs 10× OCF
1.93
≤1 = priced under 10× OCF
Debt / FCF
0.9y
SBC / FCF
4.5%
Owner earnings
$5.2B
OCF − capex − SBC
OE yield
5.0%
Share count 5y
−1.5%
per year; negative = buybacks
Growth engine (5y): reinvested 3.1% of operating cash flow at an incremental return of 342.6% — an organically fundable growth rate of about 10.7% per year (growth ≈ reinvestment rate × incremental ROIC).
Checklist
24 of 24 checks pass · 100%. Checks with structurally missing inputs are excluded.
Growth & Consistency
7/7
- pass
Revenue growth
7.9% · 5y CAGR ≥ 5%
- pass
EPS growth
12.5% · 5y CAGR ≥ 5%
- pass
FCF growth
12.0% · 5y CAGR ≥ 5%
- pass
Revenue rises consistently
9 of 9 · up in ≥ 7 of last 10 years
- pass
FCF consistently positive
10 of 10 · positive in ≥ 8 of last 10 years
- pass
Profitable every year
10 of 10 · net income > 0 in ≥ 8 of last 10
- pass
Cash flow keeps up with sales
12.0% vs 7.9% · OCF CAGR ≥ 0.9× revenue CAGR
Profitability
5/5
- pass
Net margin
20.1% · ≥ 8%
- na
Operating margin
— · ≥ 10%
- na
Gross margin stable or rising
— · no drop > 2 pts over 3y
- pass
Return on equity
73.2% · ≥ 12%
- pass
Cash ROIC
49.5% · ≥ 12%
- pass
FCF margin
24.8% · ≥ 5%
- pass
Earnings back their cash
OCF $5.4B vs NI $4.4B · OCF ≥ net income (latest FY)
Balance Sheet
4/4
- pass
Debt payable from cash flow
0.9y · LT debt ≤ 3× FCF
- pass
Cash cushion
85% · cash ≥ 50% of LT debt
- pass
Leverage
0.82 · LT debt ≤ 1.5× equity
- pass
Equity positive and compounding
$6.0B · equity > 0 and grew over ~5y
- na
Interest burden
— · interest ≤ 15% of operating income
Capital Allocation
4/4
- pass
Share count flat or shrinking
-1.5% · ≤ +0.5%/yr over ~5y
- pass
Stock comp restrained
4% · SBC ≤ 15% of FCF
- pass
Distributions funded by FCF
87% · dividends + buybacks ≤ 100% of FCF
- pass
Repurchases are a habit
10 of 10 · buybacks in ≥ 5 of last 10 years
Valuation Discipline
4/4
- pass
FCF yield
5.2% · ≥ 3%
- pass
Earnings multiple
23.8 · P/E ≤ 25
- pass
Price asks less than history delivered
7.2% vs 11.1% · implied FCF growth ≤ historical FCF CAGR
- pass
Shareholder yield
4.5% · dividends + buybacks ≥ 2% of market cap
Financial data
As filed in 10-Ks; per-share figures split-adjusted. $ in millions.
| FY | Revenue | Gross profit | Op income | Net income | EPS | OCF | CapEx | FCF | Dividends | Buybacks | SBC | Cash | LT debt | Equity | Shares |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2026 | 21,947 | — | — | 4,414 | 10.94 | 5,441 | — | 5,441 | 2,626 | 2,083 | 243 | 4,230 | 4,964 | 6,031 | 403 |
| 2025 | 20,561 | — | — | 4,080 | 9.98 | 4,940 | — | 4,940 | 2,399 | 1,281 | 266 | 3,348 | 3,975 | 6,188 | 409 |
| 2024 | 19,203 | — | — | 3,752 | 9.10 | 4,158 | — | 4,158 | 2,183 | 1,232 | 244 | 2,913 | 2,991 | 4,548 | 412 |
| 2023 | 18,012 | — | — | 3,412 | 8.21 | 4,208 | — | 4,208 | 1,904 | 1,121 | 220 | 2,084 | 2,989 | 3,509 | 416 |
| 2022 | 16,498 | — | — | 2,949 | 7.00 | 3,100 | — | 3,100 | 1,659 | 1,969 | 202 | 1,436 | 2,987 | 3,225 | 421 |
| 2021 | 15,005 | — | — | 2,599 | 6.07 | 3,093 | — | 3,093 | 1,576 | 1,372 | 175 | 2,575 | 2,985 | 5,670 | 428 |
| 2020 | 14,590 | — | — | 2,467 | 5.70 | 3,026 | — | 3,026 | 1,471 | 1,006 | 131 | 1,909 | 1,003 | 5,752 | 433 |
| 2019 | 14,110 | — | — | 2,293 | 5.24 | 2,688 | — | 2,688 | 1,293 | 938 | 167 | 1,949 | 2,002 | 5,400 | 438 |
| 2018 | 13,274 | — | — | 1,885 | 4.25 | 2,515 | — | 2,515 | 1,064 | 989 | 175 | 2,170 | 2,002 | 4,736 | 443 |
| 2017 | 12,372 | — | — | 1,788 | 3.97 | 2,126 | — | 2,126 | 995 | 1,260 | 139 | 2,780 | 2,002 | 3,977 | 450 |
| 2016 | 11,668 | — | — | 1,493 | 3.25 | 1,897 | — | 1,897 | 944 | 1,156 | 138 | 3,191 | 2,008 | 4,482 | 459 |
| 2015 | 10,939 | — | — | 1,453 | 3.05 | 1,974 | — | 1,974 | 928 | 1,557 | 143 | 1,639 | — | 4,809 | 476 |
| 2014 | 10,226 | — | — | 1,516 | 3.14 | 1,821 | — | 1,821 | 883 | 667 | 117 | 1,984 | — | 6,670 | 483 |
| 2013 | 9,442 | — | — | 1,406 | 2.89 | 1,577 | — | 1,577 | 806 | 647 | 82 | 1,404 | — | 6,190 | 487 |
| 2012 | 10,595 | — | — | 1,389 | 2.82 | 1,910 | — | 1,910 | 740 | 741 | 94 | 1,548 | — | 6,114 | 492 |
| 2011 | 9,833 | — | — | 1,254 | 2.52 | 1,706 | — | 1,706 | 692 | 733 | 90 | 1,389 | 37 | 6,010 | 498 |
| 2010 | 8,928 | — | — | 1,211 | 2.40 | 1,682 | — | 1,682 | 673 | 766 | 68 | 1,643 | 43 | 5,479 | 504 |
| 2009 | 8,838 | — | — | 1,333 | 2.63 | 1,563 | — | 1,563 | 629 | 580 | 96 | 2,265 | 46 | 5,323 | 506 |
| 2008 | 8,734 | — | — | 1,236 | 2.34 | 1,772 | — | 1,772 | 549 | 1,505 | 124 | 918 | — | — | 527 |
Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.