Market Pulse50Neutral

Automatic Data Processing, Inc.Opportunity Rank #113(ADP) Intrinsic Value & DCF Analysis (2026)

Sector: Industrials

Current Price

$209.71

Last updated: Mar 24, 2026

Price vs Intrinsic Value

$209.71
Price
$210.14
Intrinsic Value
Undervalued by 0%MOS: $168.11

Fundamental Score

70/100
Bullish

Weighted across 6 signals

Narrative Score

62/100
Improving

No change vs previous

The intrinsic value of Automatic Data Processing, Inc. (ADP) is estimated at $210.14 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $209.71, the stock appears undervalued relative to its projected cash flow fundamentals. This estimate assumes a 4.08% long-term growth rate and an 8.63% discount rate, reflecting expected future free cash flow and cost of capital.

The intrinsic value of Automatic Data Processing, Inc. (ADP) is estimated at $210.14 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $209.71, the stock appears undervalued relative to its projected cash flow fundamentals. This estimate assumes a 4.08% long-term growth rate and an 8.63% discount rate, reflecting expected future free cash flow and cost of capital.

Valuation Details

$210.14
▲ 0.21% upside
20% margin of safety: $168.11
Years: 10Growth Rate: 4.08%
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Capital Efficiency

Average Quarterly ROIC
15.15%
Cost of Capital (estimated)11%
Value StatusCreating Value

The company is earning a higher return on invested capital than it costs to raise that capital — a sign of strong, efficient value creation.

Complete historical ROIC is available with
.

Fundamental Details

70/100
BullishWeighted across 6 signals
DCF Discount
0.2% discount to price
50
FCF Yield
5.8% trailing FCF yield
94
ROIC vs WACC
ROIC 15.2% vs WACC 11.0% (1.4x)
69
Net Debt / FCF
0.4x net debt to FCF
93
Buybacks
Share count shrinking
80
FCF CAGR (5Y)
6.0% 5Y FCF CAGR
55
Strengths lead the score: FCF Yield, Net Debt / FCF.

Narrative Details

62/100
Improving
Vs 6-Month Baseline:Average (53rd pct)Weighted across 5 recent drivers
Trend: StableConfidence: 89%Updated: 40m ago
Sources: 95 (89 News · 6 Analyst)
Drivers(last 30 days)
33 regulatory scrutiny+0.9
Earnings beat+0.2
54 news sentiment+0.1
Macro headwinds+0.0
6 analyst reiterations0.0

Investment Coach

Updated 12h ago
BUYConfidence: 63%
Thesis
Automatic Data Processing, Inc. (ADP) demonstrates strong fundamentals with a robust ROIC exceeding its cost of capital by 4.15 points and a healthy free cash flow yield of 5.8%, supporting a bullish investment outlook. Although the current valuation is near fair value, the company's consistent buybacks and solid free cash flow growth suggest potential for long-term appreciation.
Key Risk
The key risk is that the ROIC may fall below the cost of capital in future quarters, undermining the company's profitability advantage.
Signals To Watch
  • Price moves to at least a mid-teens discount to fair value.
  • ROIC remains above the cost of capital over coming quarters.
  • Narrative trend shows meaningful shifts in score direction.
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Historical Growth Rates
Free Cash Flow- - -Trend CAGR: 4.08%5 Year CAGR: 6.29%

Free Cash Flow (in millions)

TTM20252024202320222021202020192018201720162015201420132012201120102009200820072006
$4,884$5,108$4,721$4,779$3,653$3,599$3,643$3,255$2,986$2,597$2,246$2,241$2,189$1,860$2,160$1,984$1,909$1,817$2,065$1,621$2,224

How Intrinziq Estimates Fair Value

Intrinziq estimates Automatic Data Processing, Inc.'s intrinsic value using a discounted cash flow (DCF) model based on free cash flow trends and a market-based discount rate. The model projects future cash flows over ten years and discounts them using a market return assumption to estimate fair value.

Automatic Data Processing, Inc.Industrials

Automatic Data Processing, Inc. provides cloud-based human capital management solutions worldwide. It operates in two segments, Employer Services and Professional Employer Organization (PEO). The Employer Services segment offers strategic, cloud-based platforms, and human resources (HR) outsourcing solutions. Its offerings include payroll, benefits administration, talent management, HR management, workforce management, insurance, retirement, and compliance services, as well as integrated HCM solutions. The PEO Services segment provides HR outsourcing solutions to small and mid-sized businesses through a co-employment model. This segment offers benefits package, protection and compliance, talent engagement, expertise, comprehensive outsourcing, and recruitment process outsourcing services. The company was founded in 1949 and is headquartered in Roseland, New Jersey.