ADP
Automatic Data Processing Inc
Price:  
308.4 
USD
Volume:  
1,635,698
United States | IT Services

ADP Fair Value

-66.7 %
Upside

What is the fair value of ADP?

As of 2025-07-08, the Fair Value of Automatic Data Processing Inc (ADP) is 102.6 USD. This value is based on the Peter Lynch's Fair Value formula. With the current market price of 308.4 USD, the upside of Automatic Data Processing Inc is -66.7%.

Is ADP a good investment?

With the market price of 308.4 USD and our fair value calculation, Automatic Data Processing Inc (ADP) is not a good investment. Investing in ADP stocks now will result in a potential loss of 66.7%.

308.4 USD
Stock Price
102.6 USD
Fair Price
FAIR VALUE CALCULATION

ADP Fair Value

Peter Lynch's formula is:

ADP Fair Value
= Earnings Growth Rate x TTM EPS
ADP Fair Value
= 10.4 x 9.85
ADP Fair Value
= 102.6

The earnings growth rate we use in the formula is the average growth rate of net income/earnings over the last 5 years. If the average growth rate is smaller than 5%, we set it to 5%. If it is larger than 25%, we set it to 25%. If the TTM EPS is negative, Peter Lynch Fair Value's result can be unreliable.

Historical Earnings
06-202006-202106-202206-202306-20245Y Avg
Net income2,466.52,598.52,948.93,4123,7523,036
YoY growth7.6%5.4%13.5%15.7%10%10.4%

ADP Fair Value - Peers Benchmarking

Market Cap (mil)EPS Fair Value Upside
a
Fiserv Inc70,515-0.9-22.31-119.5%
Paychex Inc52,4694.641.64-71.4%
Fidelity National Information Services Inc42,4731.57.64-90.5%
Global Payments Inc19,5306.4160.2100.1%
Jack Henry & Associates Inc13,1455.942.18-76.6%
Exlservice Holdings Inc7,3521.332.29-28.6%
Maximus Inc4,0185.368.04-4.6%
Evertec Inc2,357231.78-14.2%
Sykes Enterprises Inc2,1492.813.79-74.5%
Steel Connect Inc7713.9346.932748.3%

ADP Fair Value - Key Data

Market Cap (mil)125,186
P/E31.3x
Forward P/E29.8x
EPS9.85
Avg earnings growth rate10.4%
TTM earnings3,998

ADP Fair Value - Formula's Origin

Peter Lynch is one of the most legendary investors/fund managers of all time. His philosophy for stock investing is very simple and straightforward: he invests in stocks that are undervalued, meaning its P/E is less than or equal to its earnings growth rate. He believes that if a stock is trading at its fair value, the PEG ratio, which was also invented by him, should be 1.

Therefore, his formula to determine a company's fair value is:

Peter Lynch Fair Value = Earnings Growth Rate * EPS * PEG

PEG is set to 1 so we can ignore it in the calculation. Based on the formula, if the earnings growth rate of a company is 15%, Peter Lynch is willing to buy its share up to P/E = 15.