Automatic Data Processing (NASDAQ:ADP) Presents a Compelling Argument with EPS Growth and More
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 12 2025
0mins
Should l Buy ADP?
Source: Yahoo Finance
Investment Risks: Many investors chase 'story stocks' without revenue or profit, often facing losses, while established companies like Automatic Data Processing (ADP) show more stability and potential for growth.
ADP's Financial Performance: ADP has demonstrated a 13% annual growth in earnings per share (EPS) over the last three years and reported a 7.1% revenue growth to US$21 billion, indicating a positive financial trajectory.
Insider Ownership: Although insiders hold a significant amount of stock in ADP, which aligns their interests with shareholders, the company has one warning sign in its investment analysis that potential investors should consider.
Long-term Focus: The article emphasizes the importance of long-term value creation and suggests that ADP could be a strong candidate for investors looking for growth and insider backing, while also advising caution regarding insider transactions.
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Analyst Views on ADP
Wall Street analysts forecast ADP stock price to rise
12 Analyst Rating
2 Buy
7 Hold
3 Sell
Hold
Current: 202.390
Low
230.00
Averages
276.83
High
332.00
Current: 202.390
Low
230.00
Averages
276.83
High
332.00
About ADP
Automatic Data Processing, Inc. is a provider of cloud-based human capital management (HCM) solutions. Its segments include Employer Services and Professional Employer Organization (PEO). Its Employer Services segment serves clients ranging from single-employee small businesses to large enterprises with tens of thousands of employees around the world, offering a range of technology-based HCM solutions, including its cloud-based platforms, and human resource outsourcing (HRO) (other than PEO) solutions. Its offerings include Payroll Services, Benefits Administration, Talent Management, HR Management, Workforce Management, Compliance Services, Insurance Services and Retirement Services. Its PEO business, called ADP TotalSource, provides clients with guidance, technology, comprehensive employee benefits, risk management, safety, and workers’ compensation program. Its compensation management software supports the compensation planning needs.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
ADP Stock Pullback: A Buying Opportunity for Income Investors
- Stock Pullback: ADP's stock has declined nearly 70% since its mid-2025 peak, currently priced at $202.49 with a market cap of $81 billion, making it an attractive option for income-focused investors.
- Financial Performance: The company reported a 6% year-over-year revenue increase to $5.4 billion in its fiscal second quarter, exceeding estimates, with earnings per share of $2.62, an 11% improvement from the previous year, indicating a solid financial foundation.
- Outlook: ADP raised its full-year sales and profit guidance, expecting 6% revenue growth and 9% to 10% earnings growth, although the market remains cautious about the short-term outlook.
- Dividend Appeal: With a dividend yield of 3.3% and a history of increasing dividends for 51 consecutive years, ADP demonstrates a strong commitment to shareholders, making it suitable for investors seeking stable income.
See More
U.S. Private Sector Employment Continues to Grow
- Employment Growth Trend: For the four weeks ending April 4, 2026, U.S. private employers added an average of 54,750 jobs per week, indicating a positive trend with five consecutive weeks of hiring improvement, reflecting signs of economic recovery.
- Data Source and Adjustments: These figures are derived from the NER Pulse, utilizing ADP's high-frequency data that is seasonally adjusted to ensure accurate estimates of real-time employment trends, although these preliminary numbers may change as new data is incorporated.
- Release Frequency and Transparency: The NER Pulse is published every Tuesday at 8:15 a.m., providing weekly estimates of employment changes along with 12 weeks of historical data, enhancing market transparency and confidence regarding employment conditions.
- ADP's Mission and Impact: ADP Research aims to enhance work productivity through data-driven insights, with over 1.1 million clients relying on its innovative solutions to tackle business challenges globally, further driving economic growth.
See More
ADP Honors 2026 HCM Distinction Award Winners
- Agility at Work Award: Northwood Investors partnered with ADP to unify payroll, benefits, and workforce management, creating a centralized HCM foundation that provides real-time data to support global business growth, enhancing compliance and employee experience.
- Culture at Work Award: Thrive Restaurant Group successfully integrated nine systems into a unified HCM platform while scaling from 2,000 to 8,000 employees, reducing turnover by 57% and saving $3.5 million annually, thereby reinforcing its people-first culture.
- Global Solutions at Work Award: Four Seasons implemented standardized global payroll processes with ADP, enabling rapid onboarding of new properties and enhancing employee experience and market consistency, thus strengthening its people-first culture.
- Innovation at Work Award: LRS unified hiring, onboarding, and payroll management, improving labor planning and compliance, while real-time dashboards and salary benchmarking enhanced cost control, supporting its rapidly growing business needs.
See More
ADP Honors 2026 HCM Distinction Award Winners
- Agility at Work Award: Northwood Investors partnered with ADP to unify payroll, benefits, and workforce management, creating a centralized HCM foundation that provides real-time data across its U.S. and European portfolio, enhancing compliance and employee experience while driving business growth.
- Culture at Work Award: Thrive Restaurant Group scaled from 2,000 to 8,000 employees while integrating nine systems, achieving a 57% reduction in turnover and saving $3.5 million annually, thereby reinforcing its people-first culture.
- Global Solutions at Work Award: Four Seasons implemented standardized global payroll processes with ADP, enabling rapid onboarding of new properties and enhancing employee experience and market consistency, further solidifying its luxury brand image worldwide.
- Innovation at Work Award: LRS unified hiring, onboarding, and payroll management, improving workforce planning efficiency, reducing turnover, and strengthening compliance, ensuring effective HR management during rapid expansion through over 50 acquisitions.
See More
U.S. Private Sector Employment Continues to Grow
- Employment Growth Trend: For the four weeks ending March 28, 2026, U.S. private employers added an average of 39,250 jobs per week, indicating a strong employment growth trend and marking the fourth consecutive week of significant increases, reflecting a positive economic recovery momentum.
- Data Source and Adjustments: These figures are derived from the NER Pulse, which utilizes ADP's high-frequency data and is seasonally adjusted to ensure accurate estimates of real-time employment trends, highlighting the ongoing rise in labor demand in the market.
- Historical Data Release: The NER Pulse is published every Tuesday at 8:15 a.m. ET, providing 12 weeks of historical data that aids businesses and policymakers in understanding employment market dynamics, thus supporting informed decision-making processes.
- Future Release Schedule: The next NER Pulse will be released on April 21, 2026, continuing to monitor changes in the employment market and providing stakeholders with the latest employment data and trend analysis.
See More
ADP Stock Drops 33.5%: Is This a Buying Opportunity?
- Strong Long-Term Revenue Growth: ADP has achieved an annualized revenue growth rate of 7.8% over the past five years, surpassing the average performance of business services companies, indicating strong customer resonance and laying the groundwork for sustained future growth.
- Improved Free Cash Flow Margin: With an average free cash flow margin of 20.7% over the last five years, ADP has demonstrated its ability to reinvest effectively, return capital to shareholders, and maintain a competitive edge, reflecting its outstanding performance in the business services sector.
- Significant Increase in ROIC: ADP's return on invested capital (ROIC) has risen significantly in recent years, suggesting that its competitive advantages or profitable growth opportunities are expanding, which may attract more investor interest in its future growth potential.
- Reasonable Stock Valuation: Despite the recent drop in ADP's stock price to $188.95, with a forward P/E ratio of 17, this presents a potential entry point for investors, especially given the company's solid fundamentals.
See More
ADP Stock Pullback: A Buying Opportunity for Income Investors
- Stock Pullback: ADP's stock has declined nearly 70% since its mid-2025 peak, currently priced at $202.49 with a market cap of $81 billion, making it an attractive option for income-focused investors.
- Financial Performance: The company reported a 6% year-over-year revenue increase to $5.4 billion in its fiscal second quarter, exceeding estimates, with earnings per share of $2.62, an 11% improvement from the previous year, indicating a solid financial foundation.
- Outlook: ADP raised its full-year sales and profit guidance, expecting 6% revenue growth and 9% to 10% earnings growth, although the market remains cautious about the short-term outlook.
- Dividend Appeal: With a dividend yield of 3.3% and a history of increasing dividends for 51 consecutive years, ADP demonstrates a strong commitment to shareholders, making it suitable for investors seeking stable income.
See More
U.S. Private Sector Employment Continues to Grow
- Employment Growth Trend: For the four weeks ending April 4, 2026, U.S. private employers added an average of 54,750 jobs per week, indicating a positive trend with five consecutive weeks of hiring improvement, reflecting signs of economic recovery.
- Data Source and Adjustments: These figures are derived from the NER Pulse, utilizing ADP's high-frequency data that is seasonally adjusted to ensure accurate estimates of real-time employment trends, although these preliminary numbers may change as new data is incorporated.
- Release Frequency and Transparency: The NER Pulse is published every Tuesday at 8:15 a.m., providing weekly estimates of employment changes along with 12 weeks of historical data, enhancing market transparency and confidence regarding employment conditions.
- ADP's Mission and Impact: ADP Research aims to enhance work productivity through data-driven insights, with over 1.1 million clients relying on its innovative solutions to tackle business challenges globally, further driving economic growth.
See More
ADP Honors 2026 HCM Distinction Award Winners
- Agility at Work Award: Northwood Investors partnered with ADP to unify payroll, benefits, and workforce management, creating a centralized HCM foundation that provides real-time data to support global business growth, enhancing compliance and employee experience.
- Culture at Work Award: Thrive Restaurant Group successfully integrated nine systems into a unified HCM platform while scaling from 2,000 to 8,000 employees, reducing turnover by 57% and saving $3.5 million annually, thereby reinforcing its people-first culture.
- Global Solutions at Work Award: Four Seasons implemented standardized global payroll processes with ADP, enabling rapid onboarding of new properties and enhancing employee experience and market consistency, thus strengthening its people-first culture.
- Innovation at Work Award: LRS unified hiring, onboarding, and payroll management, improving labor planning and compliance, while real-time dashboards and salary benchmarking enhanced cost control, supporting its rapidly growing business needs.
See More
ADP Honors 2026 HCM Distinction Award Winners
- Agility at Work Award: Northwood Investors partnered with ADP to unify payroll, benefits, and workforce management, creating a centralized HCM foundation that provides real-time data across its U.S. and European portfolio, enhancing compliance and employee experience while driving business growth.
- Culture at Work Award: Thrive Restaurant Group scaled from 2,000 to 8,000 employees while integrating nine systems, achieving a 57% reduction in turnover and saving $3.5 million annually, thereby reinforcing its people-first culture.
- Global Solutions at Work Award: Four Seasons implemented standardized global payroll processes with ADP, enabling rapid onboarding of new properties and enhancing employee experience and market consistency, further solidifying its luxury brand image worldwide.
- Innovation at Work Award: LRS unified hiring, onboarding, and payroll management, improving workforce planning efficiency, reducing turnover, and strengthening compliance, ensuring effective HR management during rapid expansion through over 50 acquisitions.
See More
U.S. Private Sector Employment Continues to Grow
- Employment Growth Trend: For the four weeks ending March 28, 2026, U.S. private employers added an average of 39,250 jobs per week, indicating a strong employment growth trend and marking the fourth consecutive week of significant increases, reflecting a positive economic recovery momentum.
- Data Source and Adjustments: These figures are derived from the NER Pulse, which utilizes ADP's high-frequency data and is seasonally adjusted to ensure accurate estimates of real-time employment trends, highlighting the ongoing rise in labor demand in the market.
- Historical Data Release: The NER Pulse is published every Tuesday at 8:15 a.m. ET, providing 12 weeks of historical data that aids businesses and policymakers in understanding employment market dynamics, thus supporting informed decision-making processes.
- Future Release Schedule: The next NER Pulse will be released on April 21, 2026, continuing to monitor changes in the employment market and providing stakeholders with the latest employment data and trend analysis.
See More
ADP Stock Drops 33.5%: Is This a Buying Opportunity?
- Strong Long-Term Revenue Growth: ADP has achieved an annualized revenue growth rate of 7.8% over the past five years, surpassing the average performance of business services companies, indicating strong customer resonance and laying the groundwork for sustained future growth.
- Improved Free Cash Flow Margin: With an average free cash flow margin of 20.7% over the last five years, ADP has demonstrated its ability to reinvest effectively, return capital to shareholders, and maintain a competitive edge, reflecting its outstanding performance in the business services sector.
- Significant Increase in ROIC: ADP's return on invested capital (ROIC) has risen significantly in recent years, suggesting that its competitive advantages or profitable growth opportunities are expanding, which may attract more investor interest in its future growth potential.
- Reasonable Stock Valuation: Despite the recent drop in ADP's stock price to $188.95, with a forward P/E ratio of 17, this presents a potential entry point for investors, especially given the company's solid fundamentals.
See More
