Market Pulse59Neutral

Automatic Data Processing, Inc.Opportunity Rank #140(ADP) Intrinsic Value & DCF Analysis (2026)

Sector: Industrials

Current Price

$214.09

Last updated: May 08, 2026

Price vs Intrinsic Value

$214.09
Price
$255.53
Intrinsic Value
Undervalued by 19%MOS: $204.42

Fundamental Score

81/100
Bullish

Weighted across 6 signals

Narrative Score

68/100
Improving

-1 vs previous

Trend Score

35/100
Weak

As of 2026-05-08

The intrinsic value of Automatic Data Processing, Inc. (ADP) is estimated at $255.53 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $214.09, the stock appears undervalued relative to its projected cash flow fundamentals. This estimate assumes a 4.24% 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 $255.53 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $214.09, the stock appears undervalued relative to its projected cash flow fundamentals. This estimate assumes a 4.24% long-term growth rate and an 8.63% discount rate, reflecting expected future free cash flow and cost of capital.

Valuation Details

$255.53
▲ 19.36% upside
20% margin of safety: $204.42
Years: 10Growth Rate: 4.24%
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Capital Efficiency

Average Quarterly ROIC
15.36%
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

81/100
BullishWeighted across 6 signals
DCF Discount
19.4% discount to price
82
FCF Yield
6.7% trailing FCF yield
100
ROIC vs WACC
ROIC 15.4% vs WACC 11.0% (1.4x)
70
Net Debt / FCF
0.1x net debt to FCF
97
Buybacks
Share count shrinking
80
FCF CAGR (5Y)
9.6% 5Y FCF CAGR
73
Strengths lead the score: DCF Discount, FCF Yield.

Narrative Details

68/100
Improving
-1 vs previous · +1 new driversVs 6-Month Baseline:Above Avg (76th pct)Weighted across 4 recent drivers
Trend: Improving upConfidence: 99%Updated: 16h ago
Sources: 90 (82 News · 8 Analyst)
Drivers(last 30 days)
47 news sentiment+1.1
33 regulatory scrutiny+0.5
2 earnings beat+0.2
8 analyst reiterations0.0

Trend Details

35/100
WeakAs of 2026-05-08311 daily bars used
6M Relative Strength vs SPY-26.8%
3M Relative Strength vs SPY-14.7%
Distance from 52-Week High-34.8%
Price vs 21 EMA68 · +3.0%
Price vs 50 EMA56 · +1.3%
21 EMA vs 50 EMA36 · -1.6%
3M RS vs SPY8 · -14.7%
6M RS vs SPY5 · -26.8%
Distance from 52W High30 · -34.8%

Investment Coach

Updating... 1d ago
BUYConfidence: 81%
Thesis
Automatic Data Processing, Inc. (ADP) is a strong buy with an estimated fair value 24.5% above the current price, supported by a robust fundamental score of 83 and a return on invested capital (ROIC) that exceeds its cost of capital by 4.4 percentage points. The company's improving narrative score and solid free cash flow metrics further reinforce its attractive investment profile.
Key Risk
A key risk is if ADP's ROIC falls below its cost of capital, which could undermine its valuation and growth prospects.
Signals To Watch
  • Monitor whether valuation discount remains above 10%.
  • Confirm ROIC stays above cost of capital over coming quarters.
  • Follow narrative trend for meaningful shifts in the score direction.
Ask the Coach - Available with
Historical Growth Rates
Free Cash Flow- - -Trend CAGR: 4.24%5 Year CAGR: 9.84%

Free Cash Flow (in millions)

TTM20252024202320222021202020192018201720162015201420132012201120102009200820072006
$5,754$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.