With a market cap of $125.6 billion, Automatic Data Processing, Inc. (ADP) is a leading provider of human capital management (HCM) solutions and business outsourcing services. Headquartered in Roseland, New Jersey, ADP specializes in payroll processing, talent management, HR technology, and workforce analytics, serving businesses of all sizes across various industries.
Shares of Automatic Data Processing have slightly outperformed the broader market over the past year. The stock has gained 22.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 22.3%. In 2025, the stock is up 5.3%, while the SPX has gained 4% on a YTD basis.
Zooming in further, ADP has lagged behind the iShares Expanded Tech-Software Sector ETF’s (IGV) 22.4% return over the past 52 weeks and 6.6% YTD gains.
On Jan. 29, ADP reported its Q2 earnings, leading to a slight uptick in its stock price. The company posted a profit of $963.2 million, or $2.35 per share, surpassing Wall Street expectations of $2.27 per share and reflecting a 10% year-over-year increase. Revenue grew 8% to $5.05 billion, exceeding analysts’ estimates of $4.97 billion. Adjusted EBIT rose 11% to $1.3 billion, while the adjusted EBIT margin expanded by 60 basis points to 25.2%. ADP reaffirmed its fiscal 2025 outlook, projecting revenue growth of 6% to 7%, adjusted EBIT margin expansion of 30 to 50 basis points, and adjusted diluted EPS growth of 7% to 9%.
For the current fiscal year, ending in June 2025, analysts expect ADP’s EPS to grow 8.2% to $9.93 on a diluted basis. The company's earnings surprise history is robust. It beat the consensus estimate in the last four quarters.
Among the 18 analysts covering ADP stock, the consensus rating is a “Hold.” That’s based on three “Strong Buy” ratings, 14 “Holds,” and one “Strong Sell.”
The configuration has been stable over the past few months.
On Feb. 3, DBS analyst Sachin Mittal maintained a “Hold” rating on Automatic Data Processing, with a price target of $306, which indicates that the stock trades at a premium.
The mean price target of $309.27 represents a marginal premium compared to ADP’s current price levels. The Street-high price target of $350 suggests an upside potential of 13.6%.
