Roseland, New Jersey-based Automatic Data Processing, Inc. (ADP) engages in the provision of cloud-based human capital management (HCM) solutions worldwide. With a market cap of $102.9 billion, Automatic Data Processing operates through Employer Services and Professional Employer Organization (PEO) segments.
The HCM solutions giant has notably underperformed the broader market over the past year. ADP stock prices have declined 13% on a YTD basis and plunged 17.2% over the past 52 weeks, compared to the S&P 500 Index’s ($SPX) 14.6% gains in 2025 and 12.6% returns over the past year.
Narrowing the focus, Automatic Data has also underperformed the sector-focused Technology Select Sector SPDR Fund’s (XLK) 23.3% gains on a YTD basis and 21.8% surge over the past 52 weeks.
Despite reporting better-than-expected results, Automatic Data Processing’s stock prices declined 6.6% in the trading session following the release of its Q1 results on Oct. 29. The company’s topline for the quarter grew 7.1% year-over-year to $5.2 billion, beating the Street’s expectations by 95 bps. Meanwhile, its adjusted EPS increased 6.9% year-over-year to $2.49, surpassing the consensus estimates by 2.1%. However, its operating cash flow for the quarter plunged 22.1% year-over-year to $642.3 million, which likely unsettled investor confidence.
For the full fiscal 2026, ending in June, analysts expect ADP to deliver an adjusted EPS of $10.92, up 9.1% year-over-year. Further, the company has a solid earnings surprise history. It has surpassed the Street’s bottom-line projections in each of the past four quarters.
Among the 18 analysts covering the ADP stock, the consensus rating is a “Hold.” That’s based on three “Strong Buys,” 13 “Holds,” and two “Strong Sells.”
This configuration is slightly more pessimistic than a month ago, when only one analyst gave a “Strong Sell” recommendation.
On Oct. 30, Wells Fargo (WFC) analyst Jason Kupferberg reiterated an “Underweight” rating on ADP and notched down the price target from $288 to $272.
ADP’s mean price target of $294.50 represents a 15.7% premium to current price levels. Meanwhile, the street-high target of $332 suggests a 30.4% upside potential.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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