Automatic Data Processing logged a -0.2% change during today's morning session, and is now trading at a price of $255.68 per share.
Automatic Data Processing returned losses of -16.5% last year, with its stock price reaching a high of $329.93 and a low of $247.18. Over the same period, the stock underperformed the S&P 500 index by -29.3%. AThe company's 50-day average price was $274.34. Automatic Data Processing, Inc. provides cloud-based human capital management (HCM) solutions worldwide. Based in Roseland, NJ, the Large-Cap Industrials company has 67,000 full time employees. Automatic Data Processing has offered a 2.4% dividend yield over the last 12 months.
Growing Revenues but Not Enough Current Assets to Cover Current Liabilities:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $14,110 | $14,590 | $15,005 | $16,498 | $18,012 | $19,203 |
| Operating Margins | 21% | 22% | 22% | 23% | 25% | 25% |
| Net Margins | 16% | 17% | 17% | 18% | 19% | 20% |
| Net Income (M) | $2,293 | $2,466 | $2,598 | $2,949 | $3,412 | $3,752 |
| Net Interest Expense (M) | $130 | $107 | $60 | $82 | $253 | $287 |
| Depreciation & Amort. (M) | $409 | $480 | $511 | $515 | $549 | $562 |
| Diluted Shares (M) | 433 | 429 | 422 | 416 | 412 | 409 |
| Earnings Per Share | $5.24 | $5.7 | $6.07 | $7.0 | $8.21 | $9.1 |
| EPS Growth | n/a | 8.78% | 6.49% | 15.32% | 17.29% | 10.84% |
| Avg. Price | $146.61 | $142.85 | $192.54 | $210.93 | $232.97 | $256.31 |
| P/E Ratio | 27.82 | 24.93 | 31.56 | 29.96 | 28.24 | 28.04 |
| Free Cash Flow (M) | $2,526 | $2,854 | $2,915 | $2,925 | $4,001 | $3,949 |
| CAPEX (M) | $162 | $173 | $179 | $174 | $206 | $208 |
| EV / EBITDA | 19.07 | 16.61 | 21.36 | 20.67 | 19.52 | 19.56 |
| Total Debt (M) | $3,004 | $1,004 | $2,986 | $2,988 | $2,990 | $3,992 |
| Net Debt / EBITDA | 0.44 | -0.16 | 0.32 | 0.38 | 0.27 | 0.33 |
| Current Ratio | 1.02 | 1.06 | 1.04 | 0.99 | 1.01 | 1.0 |
Automatic Data Processing benefits from growing revenues and increasing reinvestment in the business, strong operating margins with a stable trend, and generally positive cash flows. The company's financial statements show positive EPS growth and healthy leverage levels. However, the firm has not enough current assets to cover current liabilities because its current ratio is 1.0.
Automatic Data Processing's Valuation Is in Line With Its Sector Averages:
Automatic Data Processing has a trailing twelve month P/E ratio of 27.1, compared to an average of 24.03 for the Industrials sector. Based on its EPS guidance of $10.87, the company has a forward P/E ratio of 25.2. The 11.0% compound average growth rate of Automatic Data Processing's historical and projected earnings per share yields a PEG ratio of 2.47. This suggests that these shares are overvalued. Furthermore, Automatic Data Processing is likely overvalued compared to the book value of its equity, since its P/B ratio of 16.24 is higher than the sector average of 2.89. The company's shares are currently trading 407.1% below their Graham number. Ultimately, Automatic Data Processing's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.
There's an Analyst Consensus of Some Upside Potential for Automatic Data Processing:
The 13 analysts following Automatic Data Processing have set target prices ranging from $245.0 to $332.0 per share, for an average of $293.23 with a hold rating. The company is trading -12.8% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Automatic Data Processing has an average amount of shares sold short because 2.1% of the company's shares are sold short. Institutions own 86.8% of the company's shares, and the insider ownership rate stands at 0.15%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 10% stake in the company is worth $10,659,205,060.
