ADP Intrinsic Value – ADP Stock Rises Tuesday, Outperforming Market
December 14, 2023
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Tuesday was a very successful day for Automatic Data Processing ($NASDAQ:ADP) Inc. (ADP). Its stock rose significantly, outperforming the rest of the market and demonstrating its strength in the industry. ADP is one of the largest providers of payroll and human resources services to businesses around the world. They offer an array of services, such as payroll processing, tax filing, benefits administration, and retirement services. The company has been around for more than sixty years and is a trusted partner for many businesses when it comes to managing their payroll and human resources needs.
Their long-standing history of providing reliable and secure services makes them a top choice in the market. The stock’s rise on Tuesday is evidence of the continuing success of the company. Investors are confident that ADP will continue to be a good investment in the future.
Market Price
Tuesday was a good day for AUTOMATIC DATA PROCESSING stock, with the stock rising by more than 1% in comparison to the market. AUTOMATIC DATA PROCESSING opened at $237.3 and closed at $239.2, a 1.1% increase from the prior closing price of $236.7. This gain was larger than that of the market, which stayed relatively flat overall. Overall, the stock seems to be on an upward trend, which could be an indication of better performance in the future. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for ADP. More…
| Total Revenues | Net Income | Net Margin |
| 17.43k | 3.49k | 20.0% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for ADP. More…
| Operations | Investing | Financing |
| 3.82k | -1.16k | -1.28k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for ADP. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 49.32k | 45.85k | 8.43 |
Key Ratios Snapshot
Some of the financial key ratios for ADP are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 7.5% | 12.0% | 27.6% |
| FCF Margin | ROE | ROA |
| 18.6% | 86.2% | 6.1% |
Analysis – ADP Intrinsic Value
At GoodWhale, we’ve conducted a thorough analysis of AUTOMATIC DATA PROCESSING’s fundamentals. Our proprietary Valuation Line has determined the fair value of a share of AUTOMATIC DATA PROCESSING to be around $241.8. Currently, the stock is trading at $239.2, indicating that it is undervalued by 1.1%. We believe that there is an opportunity for investors to acquire AUTOMATIC DATA PROCESSING shares at a bargain price. More…
Peers
The competition in the payroll processing and human resources management industry is fierce. Automatic Data Processing Inc (ADP) is the largest player in the industry, with a market share of over 26%. Its closest competitors are Paychex Inc, Insperity Inc, and Trucept Inc, which have market shares of around 10%, 7%, and 6%, respectively. While all four companies offer similar services, ADP has a clear advantage in terms of size and scale.
– Paychex Inc ($NASDAQ:PAYX)
Paychex Inc is a human resource consulting and payroll processing company headquartered in Rochester, New York. As of May 2019, Paychex serves over 650,000 small and medium sized businesses. The company has a market cap of $40.17B as of 2022 and a Return on Equity of 38.35%. Paychex was founded in 1971 by B. Thomas Golisano and Robert C.risk.
– Insperity Inc ($NYSE:NSP)
Inspriety Inc is a business services provider located in the United States. The company offers a suite of human resources and business solutions designed to help businesses improve their productivity and bottom line. Inspriety’s services include payroll processing, benefits administration, and talent management. The company serves over 100,000 businesses of all sizes across the United States.
– Trucept Inc ($OTCPK:TREP)
Trucept Inc is a publicly traded company with a market capitalization of 221.15 thousand as of 2022. The company has a return on equity of 42.12%. Trucept Inc is a provider of cloud-based software solutions for small and medium-sized businesses. The company’s software solutions include accounting, human resources, customer relationship management, and e-commerce.
Summary
Automatic Data Processing Inc. (ADP) stock surged on Tuesday, outperforming the overall market. Investors continue to recognize the company as a strong and reliable investment. The company has been able to maintain this strong performance by focusing on core strengths, including payroll processing, human capital management, and risk compliance services.
Analysts are bullish on the stock, citing its solid balance sheet, consistent revenue and earnings growth, and a high dividend yield. Long term investors view ADP as an attractive option for portfolio diversification, as the company’s fundamentals remain strong and its financial performance remains stable despite market volatility.
