Automatic Data Processing Inc.
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+ FollowMarket Cap$119.65B
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Earnings Call Q1 2027
October 28, 2026 - AI Summary
Q1 performance beat expectations (growth + margin + EPS): ADP reported ~6% revenue growth, ~130 bps adjusted EBIT margin expansion, and ~13% adjusted EPS growth in fiscal Q1 (ahead of expectations). Management attributed strength to AI-enabled productivity improvements and continued momentum in core HR/payroll and employer services.
AI transformation delivering measurable efficiency (Zone + ADP Assist): Deployment of ADP’s proprietary AI-infused service platform “The Zone” rose from 48% of the service population at FY26 exit to 60% by Q1 exit. Productivity impact included a further 7% reduction in service contacts per client YoY in the down-market core HR/payroll business (additional to the prior ~8% reduction achieved in full FY26). Management said this supports continued progress on cost-to-serve and client experience.
Guidance raised for FY27 revenue, margins broadly maintained: ADP increased fiscal 27 consolidated revenue growth guidance to ~6%, while maintaining adjusted EBIT margin expansion of 70–90 bps. Adjusted EPS growth forecast raised to ~10%–12% (supported by share repurchases). Effective tax rate guided around 23%. Management emphasized continued investment (AI/product/cloud/global scaling) while funding it through productivity/float and disciplined capex.
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$392.03
26.5% upside
Current Fair Value
26.5% upsideUndervalued by 26.5% based on the discounted cash flow analysis.
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Share Statistics
| Market cap | $119.65 Billion |
|---|---|
| Enterprise Value | $121.87 Billion |
| Annual dividend | $6.80 |
| Dividend yield | 2.24% |
| Earnings per Share | $10.97 |
| Beta | 0.79 |
| Outstanding Shares | 396,500,000 |
Return
| Return on Equity | 90.63% |
|---|---|
| Return on Assets | 7.27% |
| Return on Invested Capital | 49.63% |
Valuation & Multiples
| P/E Ratio | 26.82 |
|---|---|
| PEG | 198.08 |
| Price to Sales | 5.53 |
| Price to Book Ratio | 25.83 |
| Enterprise Value to Revenue | 5.44 |
| Enterprise Value to EBIT | 20.6 |
| Enterprise Value to Net Income | 26 |
| Total Debt to Enterprise | 0.04 |
| Debt to Equity | 1.09 |
Revenue Sources
No data
Last Earnings Call
Report Date
November 4, 2026
EPS Estimate
$2.75
Consensus analyst estimateRevenue Estimate
$5.48 B
Consensus analyst estimateNext Earnings Call
Expected Date
January 27, 2027
EPS Estimate
$2.90
Consensus analyst estimateRevenue Estimate
$5.68 B
Consensus analyst estimateInstitutional Put/Call Ratio
Compares institutional put options with call options. At 0.08, the ratio is below 1, so institutions hold more calls than puts.
| Put/Call Ratio | 0.0844▼ 111.32% |
|---|---|
| Total Calls | 48,596▼ 97.79% |
| Total Puts | 4,100▼ 99.84% |
Institutional Ownership
Holdings and activity of institutional investors.
| Ownership % | 17.49%▼ 74.11% |
|---|---|
| Total Invested | $18.05B▼ 78.03% |
| Investors Holding | 1,414▼ 947.00% |
About Automatic Data Processing Inc.
58,000 employees
CEO: Carlos Rodriguez
ADP is a comprehensive global provider of cloud-based human capital management (HCM) solutions that unite HR, payroll, talent, time, tax and benefits administration, and a leader in business outsourcing services, analytics and compliance...