Staffing & Employment Services · NASDAQ
Current Price
$215.06
Intrinsic Value
Use the calculator below to estimate
Run a PE ratio stock valuation on Automatic Data Processing, Inc. with auto-filled earnings data, adjustable target PE, and instant fair value estimate.
Open PE Calculator for ADPAutomatic 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.
Earnings Yield
5.04%
ROE (TTM)
68.7%
Based on trailing twelve-month data, ADP has earnings per share of N/A and trades at a PE ratio of N/A. These are key inputs for stock valuation using the PE ratio method.
The trailing twelve-month PE ratio of ADP reflects how much investors pay per dollar of Automatic Data Processing, Inc.'s earnings. This metric is most useful when compared to Staffing & Employment Services peers and the company's own historical range.
Whether ADP is overvalued depends on comparing its PE ratio to Staffing & Employment Services peers, historical averages, and growth expectations. A PE above the sector average may indicate overvaluation, but high-growth companies often command premium multiples. Consider pairing PE analysis with a DCF model for a more complete picture.
To value Automatic Data Processing, Inc. using PE: (1) Compare the current PE against the Staffing & Employment Services median to assess relative pricing, (2) check the PEG ratio to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
The PEG ratio divides the PE ratio by the expected earnings growth rate, providing a growth-adjusted valuation metric. A PEG below 1.0 may indicate undervaluation relative to growth, while above 2.0 may suggest overvaluation. PEG is most reliable for companies with stable, predictable earnings growth.
PE ratio gives a quick relative read — how ADP is priced versus Staffing & Employment Services peers. DCF provides an absolute value based on projected free cash flows. For ADP, with a strong ROE of 68.7%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
