Automatic Data Processing is a high-quality franchise with strong margins and consistent earnings delivery, but the stock has fully priced in its attributes — the technical trend has deteriorated to a confirmed downtrend, the reward-to-risk setup is unfavorable, and the price is within 3.3% of its upside target, leaving little reason to add.
Thesis pillars
- High Quality Business Franchise→Stable
- Earnings Consistency Beat Streak→Stable
- Confirmed Downtrend Death Cross↓Deteriorating
- +1 more pillar — see the Why tab for full reasoning
Automatic Data Processing, Inc. (ADP) Stock Analysis
Technology · Software - Application
Sell if holding. Analyst target reached at $272.96 — A.R:R is negative (-0.5) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Negative momentum.
ADP provides human capital management (HCM) solutions — payroll, HR, benefits, talent, and workforce management — to more than 1.1 million clients across over 140 countries, paying over 42 million workers. The company operates two segments, Employer Services and the ADP... Read more
Sell if holding. Analyst target reached at $272.96 — A.R:R is negative (-0.5) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Negative momentum. Chart setup: No clear chart pattern; technical signals are mixed. Score 5.2/10, moderate confidence.
Passes 6/8 gates (clean insider activity, no SEC red flags, news events none recent, earnings proximity 75d clear, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum and favorable risk/reward ratio. Suitability: moderate.
About Automatic Data Processing, Inc.
About Automatic Data Processing, Inc.
ADP pays more than 42 million workers across over 140 countries and territories, serving 1.1 million clients through two reportable segments: Employer Services, its core HCM and payroll business, and the ADP TotalSource professional employer organization, which covers more than 750,000 worksite employees. In fiscal 2025 (ended June 30), the company processed over 78 million employee year-end tax statements and moved more than $3.3 trillion in client funds.
ADP generates revenue primarily from recurring fees tied to payroll processing, HR outsourcing, benefits administration, and workforce management software sold to employers ranging from single-employee businesses to multinational enterprises. The Employer Services segment sells cloud-based platforms — RUN Powered by ADP for small businesses, ADP Workforce Now for mid-sized and large businesses, and the newer ADP Lyric HCM for large global enterprises — alongside compliance, tax, and insurance services delivered through ADP's own licensed insurance agency. The ADP TotalSource PEO segment instead earns fees through a co-employment model, where ADP and the client jointly employ worksite employees and ADP assumes payroll, tax filing, and benefits administration duties for more than 18,000 clients. ADP Retirement Services further extends the revenue base by administering 401(k) and other retirement plans for over 190,000 employers, with an SEC-registered investment adviser subsidiary, ADP Strategic Plan Services, providing investment management. Interest income earned on client funds held before remittance to tax authorities represents an additional, distinct revenue stream tied to prevailing interest rates.
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ADP's regulatory exposure spans several overlapping regimes. As operator of ADP Trust Bank and a registered prepaid-access provider, it falls under Bank Secrecy Act anti-money-laundering rules enforced by Treasury's Financial Crimes Enforcement Network, while European operations run under Binding Corporate Rules adopted to satisfy GDPR cross-border transfer requirements. Its ADP TotalSource co-employment model creates a distinct dependency: changes in how regulators treat the joint-employer relationship for worksite-employee health and welfare plans could affect demand for that segment. The EU Artificial Intelligence Act and emerging U.S. state AI statutes are flagged as risks that may constrain how ADP deploys generative-AI features such as ADP Assist.
See also: Technology · Software - Application
From Automatic Data Processing, Inc.'s most recent 10-K filing, extracted August 9, 2026.
Recent developments
updated 2026-08-15Recent Developments — Automatic Data Processing, Inc.
Latest news
- NEWS A Look at Automatic Data Processing Inc (ADP) After 3.5% Gain -- GF Value $305.75 vs Price $273.37 - GuruFocus — GuruFocus positive
- NEWS ADP Is a Dominant HR Solutions Provider - Morningstar — Morningstar positive
- NEWS Automatic Data Processing (NASDAQ:ADP) Stock Price Expected to Rise, BMO Capital Markets Analyst Says - MarketBeat — MarketBeat positive
- NEWS ADP Stock Surges on Strong Q4 Earnings Beat, AI Tools Power Up Growth - Benzinga — Benzinga positive
- NEWS ADP Stock Surges on Strong Q4 Earnings Beat, AI Tools Power Up Growth - benzinga.com — benzinga.com positive
Generated 2026-08-15T11:27:12Z.
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Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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Rating Breakdown
1 floor-breaker
Momentum below the gate floor. Component breakdown shows what dragged the score down.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Analyst target reached at $272.96 — A.R:R is negative (-0.5) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Negative momentum. Chart setup: No clear chart pattern; technical signals are mixed. Prior stop was $255.76. Score 5.2/10, moderate confidence.
Take-profit target: $313.90 (-5.5% upside). Prior stop was $255.76. Stop-loss: $255.76.
Analyst target reached - limited upside remaining; Negative momentum.
Automatic Data Processing, Inc. trades at a P/E of 24.6 (forward 20.6). TrendMatrix value score: 4.7/10. Verdict: Sell.
23 analysts cover ADP with a consensus score of 3.3/5. Average price target: $287.
What does Automatic Data Processing, Inc. do?ADP provides human capital management (HCM) solutions — payroll, HR, benefits, talent, and workforce management — to...
ADP provides human capital management (HCM) solutions — payroll, HR, benefits, talent, and workforce management — to more than 1.1 million clients across over 140 countries, paying over 42 million workers. The company operates two segments, Employer Services and the ADP TotalSource professional employer organization (PEO), and in fiscal 2025 moved more than $3.3 trillion in client funds.