Is It Time To Reassess ADP (ADP) After This Year’s Share Price Pullback?

Simply Wall St.03-31

If you are wondering whether Automatic Data Processing (ADP) now offers fair value or a possible mispricing, the recent share performance provides several points to consider. The stock last closed at ...

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The stock last closed at ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/commercial-services/nasdaq-adp/automatic-data-processing/news/is-it-time-to-reassess-adp-adp-after-this-years-share-price\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Is It Time To Reassess ADP (ADP) After This Year’s Share Price Pullback?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIs It Time To Reassess ADP (ADP) After This Year’s Share Price Pullback?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-03-31 07:12 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/us/commercial-services/nasdaq-adp/automatic-data-processing/news/is-it-time-to-reassess-adp-adp-after-this-years-share-price><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>If you are wondering whether Automatic Data Processing (ADP) now offers fair value or a possible mispricing, the recent share performance provides several points to consider. The stock last closed at ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/commercial-services/nasdaq-adp/automatic-data-processing/news/is-it-time-to-reassess-adp-adp-after-this-years-share-price\">Source 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offers fair value or a possible mispricing, the recent share performance provides several points to consider.\nThe stock last closed at US$205.42, with a 2.0% decline over 7 days, a 4.2% decline over 30 days, an 18.8% decline year to date, but still 1.5% and 18.4% gains over 3 and 5 years respectively.\nRecent attention around ADP has focused on how its share price pullback compares with its long-run record and ongoing role as a...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4585":"ETF&股票定投概念","LU0823417737.USD":"BNP PARIBAS SUSTAINABLE GLOBAL LOW VOL EQUITY \"C\" (USD) INC","LU2506951958.HKD":"BNP PARIBAS SUSTAINABLE GLOBAL LOW VOL EQUITY \"CRH\" (HKDHDG) INC","LU1037948897.HKD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"AD\" (HKD) INC","LU0965508806.USD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"AD\" (USD) INC","LU1196500208.SGD":"NORDEA STABLE RETURN \"HB\" (SGDHDG) ACC","LU0950375773.USD":"BNP PARIBAS 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(USDHDG) ACC","IE00BYQQ9H92.USD":"BNY MELLON GLOBAL LEADERS \"A\" (USD) ACC","LU1236620834.HKD":"HSBC GIF GLOBAL SUSTAINABLE LONG TERM DIVIDEND \"AM2\" (HKD) INC","ADP":"自动数据处理","LU0690374961.EUR":"FUNDSMITH EQUITY \"R\" (EUR) INC","LU1221951129.SGD":"NORDEA 1 STABLE RETURN \"HM\" (SGDHDG) INC","LU2506951875.HKD":"BNP PARIBAS SUSTAINABLE GLOBAL LOW VOL EQUITY \"CRH\" (HKDHDG) ACC","LU0965509010.AUD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"AD\" (AUDHDG) INC","LU0690374615.EUR":"FUNDSMITH EQUITY \"R\" (EUR) ACC","LU2506952097.USD":"BNP PARIBAS SUSTAINABLE GLOBAL LOW VOL EQUITY \"CRH\" (USDHDG) ACC"},"translate_title":"今年股价回调后，是时候重新评估ADP(ADP)了吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DCF":1,"ADP":1.5},"content_text":"If you are wondering whether Automatic Data Processing (ADP) now offers fair value or a possible mispricing, the recent share performance provides several points to consider. The stock last closed at US$205.42, with a 2.0% decline over 7 days, a 4.2% decline over 30 days, an 18.8% decline year to date, but still 1.5% and 18.4% gains over 3 and 5 years respectively. Recent attention around ADP has focused on how its share price pullback compares with its long-run record and ongoing role as a major player in payroll and HR services. For many investors, this context raises questions about whether the market is reassessing its long-term expectations or simply reacting to shorter-term sentiment. On Simply Wall St's 6-point valuation checks, ADP scores 4 out of 6. You can see that breakdown in the valuation score. This sets up a closer look at different valuation methods next, along with a way at the end of this article to help you understand the story behind those numbers in more detail.  Find out why Automatic Data Processing's -31.1% return over the last year is lagging behind its peers. AdvertisementApproach 1: Automatic Data Processing Discounted Cash Flow (DCF) Analysis A Discounted Cash Flow model takes projections of a company’s future cash flows and discounts them back to today using a required rate of return. This aims to estimate what the business might be worth in the present. For Automatic Data Processing, the model used here is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month Free Cash Flow is about $4.1b. Analyst estimates and Simply Wall St extrapolations project Free Cash Flow rising to around $6.4b by the 2028 financial year, with further estimates extending out to 2035 based on a mix of analyst inputs and calculated growth rates. Aggregating these projected cash flows and discounting them provides an estimated intrinsic value of about $420.97 per share. Compared with the recent share price of US$205.42, this DCF output suggests the stock trades at a 51.2% discount to that estimate, indicating a sizeable gap between the modelled value and the market price. Result: UNDERVALUED Our Discounted Cash Flow (DCF) analysis suggests Automatic Data Processing is undervalued by 51.2%. Track this in your watchlist or portfolio, or discover 63 more high quality undervalued stocks. ADP Discounted Cash Flow as at Mar 2026 Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Automatic Data Processing. Approach 2: Automatic Data Processing Price vs Earnings For profitable companies, the P/E ratio is a useful way to relate what you pay for each share to the earnings that support that price. Investors tend to accept a higher or lower P/E depending on what they expect for future earnings growth and how much risk they see in those earnings, so there is no single \"right\" P/E level for every business. Automatic Data Processing currently trades on a P/E of 19.5x. This sits close to both the Professional Services industry average P/E of 18.4x and the peer group average of 18.7x, which suggests the market is pricing ADP broadly in line with similar companies rather than applying a clear premium or discount based on sector comparisons alone. Simply Wall St's Fair Ratio is a proprietary estimate of what the P/E could be given factors such as earnings growth, profit margins, industry, market cap and company specific risks. Because it brings these elements together, it can be more informative than a simple comparison with peers or the industry. ADP's Fair Ratio is 27.9x, which is above the current 19.5x P/E, indicating that, on this framework, the shares trade below the level implied by those fundamentals. Result: UNDERVALUED NasdaqGS:ADP P/E Ratio as at Mar 2026 P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 20 top founder-led companies. Upgrade Your Decision Making: Choose your Automatic Data Processing Narrative Earlier it was mentioned that there is an even better way to understand valuation, so Narratives are introduced here as a simple way for you to attach a clear story about Automatic Data Processing to the numbers you see. You can set your own assumptions for fair value, future revenue, earnings and margins, then see how that story stacks up against other investors on Simply Wall St's Community page. Each Narrative links a business view to a financial forecast and a fair value, updates automatically when fresh news or earnings arrive, and helps you decide how the gap between Fair Value and the current price should influence your timing decisions, whether you lean toward a higher fair value around US$387.77, closer to US$271.40, or nearer to US$214.00 for ADP. Do you think there's more to the story for Automatic Data Processing? Head over to our Community to see what others are saying! NasdaqGS:ADP 1-Year Stock Price Chart  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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