Automatic Data Processing, Inc. (ADP) DCF Valuation
Transparent DCF models put Automatic Data Processing, Inc. (ADP)'s fair value in a range of $135.66 – $347.01 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $231.17 sits within that range — roughly fairly valued on these assumptions.
Reverse DCF: at today's $231.17, the market is pricing in roughly +11.7%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of +14.5%. The price assumes a slowdown from its track record — a potential value signal if growth holds.
Current Price
$231.17
Fair-Value Range
$135.66 – $347.01
Market-Implied Growth
+11.7%/yr
vs +14.5% 5Y actual
ADP DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $3.6B · 0.40B shares · net debt $5.4B
Estimated Fair Value
$135.66
-41.3% vs $231.17
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $231.17; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $172 | $181 | $193 | $206 | $223 |
| 9.0% | $146 | $152 | $160 | $168 | $179 |
| 10.0% | $126 | $130 | $136 | $142 | $149 |
| 11.0% | $110 | $114 | $117 | $122 | $126 |
| 12.0% | $97.52 | $100 | $103 | $106 | $109 |
About Automatic Data Processing, Inc.
Automatic Data Processing, Inc. (ADP) is a global provider of cloud-based solutions designed for human capital management (HCM). The company organizes its operations into two primary segments: Employer Services and Professional Employer Organization (PEO). Through its Employer Services division, ADP delivers strategic, cloud-powered platforms and comprehensive human resources (HR) outsourcing. This encompasses a wide array of services such as payroll processing, benefits administration, talent acquisition and management, general HR and workforce management, insurance, retirement planning, and regulatory compliance, often integrated into holistic HCM solutions. Conversely, the Professional Employer Organization (PEO) segment specializes in offering HR outsourcing to small and mid-sized businesses, leveraging a co-employment framework. This segment's offerings span robust benefits packages, regulatory protection and compliance, talent engagement strategies, specialized HR expertise, all-encompassing outsourcing, and even recruitment process outsourcing. Established in 1949, ADP maintains its corporate headquarters in Roseland, New Jersey.
- Sector
- Industrials
- Industry
- Staffing & Employment Services
- CEO
- Maria Black