Automatic Data Processing (ADP)
NASDAQIndustrialsSoftware - ApplicationSnapshot 2026-07-08
$241.37-1.72%
Close 2026-07-08 · 1-day change
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Track ADP free→ADP keeps growing revenue about 7% a year. Profit margins stay strong near 26%. Earnings per share rose from $2.34 to $3.38 in recent quarters. The company has a solid track record of beating earnings estimates.
Profit margin expansion is behind target, risking thinner profits. Rising debt from recent credit agreements could pressure cash flow. If revenue growth slows below 6%, the business model may weaken.
The price is about 2% above our fair value near $242. Analysts expect roughly 7% revenue growth, which matches management's guidance. Our view aligns with consensus on growth but sees margin expansion as a risk.
Breaks if: EPS growth falls below 8% next year
Target adjusted diluted EPS growth of 10% to 11% for fiscal 2026.
Stated in 4 of last 4 quarters. EPS increased from $2.34 in 2025-Q1 to $3.38 in 2026-Q3, showing strong growth. Management's focus on EPS growth is delivering results.
Standing thesis, reviewed periodically — not a price target or advice.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
“Adjusted diluted EPS growth of 10% to 11%.”
“Raising full year guidance for revenue and adjusted diluted EPS growth.”
“Adjusted diluted EPS growth of 8% to 10%.”
“Diluted EPS growth of 8% to 10%.”
Breaks if: EBIT margin expansion is less than 0.3% in FY26
Aim to expand adjusted EBIT margin by 70 to 80 basis points in fiscal 2026.
Breaks if: Gross margin falls below 24% next year
Aim to expand adjusted EBIT margin by 70 to 80 basis points in fiscal 2026.
Breaks if: YoY revenue growth falls below 6% next year
Focus on achieving stronger revenue and earnings growth for fiscal 2026.
Stated in 4 of last 4 quarters. Revenue grew from $4.83B in 2025-Q1 to $5.94B in 2026-Q3, indicating a positive trajectory. Management's focus on revenue and earnings growth is delivering results.
“Our updated fiscal 2026 guidance reflects stronger revenue and earnings growth.”
“Raising full year guidance for revenue and adjusted diluted EPS growth.”
“Maintaining fiscal 2026 consolidated outlook for revenue growth of 5% to 6%.”
“Fiscal 2026 consolidated outlook includes revenue growth of 5% to 6%.”