ADP Relative Valuation
ADP's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, ADP is overvalued; if below, it's undervalued.
Historical Valuation
Automatic Data Processing Inc (ADP) is now in the Undervalued zone, suggesting that its current forward PE ratio of 22.63 is considered Undervalued compared with the five-year average of 27.86. The fair price of Automatic Data Processing Inc (ADP) is between 369.24 to 421.87 according to relative valuation methord. Compared to the current price of 265.67 USD , Automatic Data Processing Inc is Undervalued By 28.05%.
Relative Value
Fair Zone
369.24-421.87
Current Price：265.67
28.05%
Undervalued
22.63
PE
1Y
3Y
5Y
16.03
EV/EBITDA
Automatic Data Processing Inc. (ADP) has a current EV/EBITDA of 16.03. The 5-year average EV/EBITDA is 19.57. The thresholds are as follows: Strongly Undervalued below 16.02, Undervalued between 16.02 and 17.79, Fairly Valued between 21.35 and 17.79, Overvalued between 21.35 and 23.12, and Strongly Overvalued above 23.12. The current Forward EV/EBITDA of 16.03 falls within the Undervalued range.
17.63
EV/EBIT
Automatic Data Processing Inc. (ADP) has a current EV/EBIT of 17.63. The 5-year average EV/EBIT is 21.69. The thresholds are as follows: Strongly Undervalued below 17.65, Undervalued between 17.65 and 19.67, Fairly Valued between 23.70 and 19.67, Overvalued between 23.70 and 25.72, and Strongly Overvalued above 25.72. The current Forward EV/EBIT of 17.63 falls within the Strongly Undervalued range.
4.64
PS
Automatic Data Processing Inc. (ADP) has a current PS of 4.64. The 5-year average PS is 5.33. The thresholds are as follows: Strongly Undervalued below 4.51, Undervalued between 4.51 and 4.92, Fairly Valued between 5.74 and 4.92, Overvalued between 5.74 and 6.15, and Strongly Overvalued above 6.15. The current Forward PS of 4.64 falls within the Undervalued range.
18.40
P/OCF
Automatic Data Processing Inc. (ADP) has a current P/OCF of 18.40. The 5-year average P/OCF is 22.18. The thresholds are as follows: Strongly Undervalued below 16.99, Undervalued between 16.99 and 19.59, Fairly Valued between 24.77 and 19.59, Overvalued between 24.77 and 27.37, and Strongly Overvalued above 27.37. The current Forward P/OCF of 18.40 falls within the Undervalued range.
20.42
P/FCF
Automatic Data Processing Inc. (ADP) has a current P/FCF of 20.42. The 5-year average P/FCF is 21.31. The thresholds are as follows: Strongly Undervalued below 15.41, Undervalued between 15.41 and 18.36, Fairly Valued between 24.26 and 18.36, Overvalued between 24.26 and 27.20, and Strongly Overvalued above 27.20. The current Forward P/FCF of 20.42 falls within the Historic Trend Line -Fairly Valued range.
Automatic Data Processing Inc (ADP) has a current Price-to-Book (P/B) ratio of 16.06. Compared to its 3-year average P/B ratio of 23.79 , the current P/B ratio is approximately -32.47% higher. Relative to its 5-year average P/B ratio of 22.87, the current P/B ratio is about -29.76% higher. Automatic Data Processing Inc (ADP) has a Forward Free Cash Flow (FCF) yield of approximately 4.50%. Compared to its 3-year average FCF yield of 3.83%, the current FCF yield is approximately 17.40% lower. Relative to its 5-year average FCF yield of 3.61% , the current FCF yield is about 24.62% lower.
16.06
P/B
Median3y
23.79
Median5y
22.87
4.50
FCF Yield
Median3y
3.83
Median5y
3.61
Competitors Valuation Multiple
The average P/S ratio for ADP's competitors is 10.55, providing a benchmark for relative valuation. Automatic Data Processing Inc Corp (ADP) exhibits a P/S ratio of 4.64, which is -56.03% above the industry average. Given its robust revenue growth of 7.09%, this premium appears unsustainable.
Performance Decomposition
1Y
3Y
5Y
Market capitalization of ADP decreased by 13.78% over the past 1 year. The primary factor behind the change was an increase in Revenue Growth from 4.83B to 5.18B.
The secondary factor is the Margin Expansion, contributed -1.11%to the performance.
Overall, the performance of ADP in the past 1 year is driven by Revenue Growth. Which is more sustainable.
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Frequently Asked Questions
Is Automatic Data Processing Inc (ADP) currently overvalued or undervalued?
Automatic Data Processing Inc (ADP) is now in the Undervalued zone, suggesting that its current forward PE ratio of 22.63 is considered Undervalued compared with the five-year average of 27.86. The fair price of Automatic Data Processing Inc (ADP) is between 369.24 to 421.87 according to relative valuation methord. Compared to the current price of 265.67 USD , Automatic Data Processing Inc is Undervalued By 28.05% .
What is Automatic Data Processing Inc (ADP) fair value?
ADP's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average , adjusted by weights. The fair price of Automatic Data Processing Inc (ADP) is between 369.24 to 421.87 according to relative valuation methord.
How does ADP's valuation metrics compare to the industry average?
The average P/S ratio for ADP's competitors is 10.55, providing a benchmark for relative valuation. Automatic Data Processing Inc Corp (ADP) exhibits a P/S ratio of 4.64, which is -56.03% above the industry average. Given its robust revenue growth of 7.09%, this premium appears unsustainable.
What is the current P/B ratio for Automatic Data Processing Inc (ADP) as of Jan 09 2026?
As of Jan 09 2026, Automatic Data Processing Inc (ADP) has a P/B ratio of 16.06. This indicates that the market values ADP at 16.06 times its book value.
What is the current FCF Yield for Automatic Data Processing Inc (ADP) as of Jan 09 2026?
As of Jan 09 2026, Automatic Data Processing Inc (ADP) has a FCF Yield of 4.50%. This means that for every dollar of Automatic Data Processing Inc’s market capitalization, the company generates 4.50 cents in free cash flow.
What is the current Forward P/E ratio for Automatic Data Processing Inc (ADP) as of Jan 09 2026?
As of Jan 09 2026, Automatic Data Processing Inc (ADP) has a Forward P/E ratio of 22.63. This means the market is willing to pay $22.63 for every dollar of Automatic Data Processing Inc’s expected earnings over the next 12 months.
What is the current Forward P/S ratio for Automatic Data Processing Inc (ADP) as of Jan 09 2026?
As of Jan 09 2026, Automatic Data Processing Inc (ADP) has a Forward P/S ratio of 4.64. This means the market is valuing ADP at $4.64 for every dollar of expected revenue over the next 12 months.