On July 28, 2026, Automatic Data Processing Inc ADP shares rose 3.6% today, bringing the current price to $264.17. This price is situated within a 52-week range of $188.16 to $315.98.
- GF Valueâ„¢ verdict: Current price of $264.17 versus GF Value of $305.70 indicates a 13.6% undervaluation.
- GF Scoreâ„¢: 91/100, which suggests a strong overall performance relative to the market.
- Most notable signal: Insider activity shows that insiders bought $0.7M and sold $0.2M in the last 3 months, indicating confidence in the company.
Is ADP Overvalued or Undervalued?
Based on the latest data, ADP's current price of $264.17 is significantly below the GF Valueâ„¢ estimate of $305.70, which suggests that the stock is undervalued by approximately 13.6%. The GF Valueâ„¢ is GuruFocus' proprietary intrinsic value estimate, calculated using historical trading multiples as well as past and projected business growth. This undervaluation presents an opportunity for potential investors, especially considering the company's strong financial metrics.
The GF Valuation label categorizes ADP as modestly undervalued. This indicates not only a favorable comparison of current price to intrinsic value but also suggests that the stock may have room for growth in the near future. However, investors should remain cautious of the broader market conditions and ADP's performance metrics, especially given the -11.5% return over the past year.
How Does ADP's Valuation Compare to Its History?
| Metric | Current | Historical |
|---|---|---|
| P/E (TTM) | 24.6x | 30.1x (5-Year Median) |
| Forward P/E | 21.7x | - |
ADP's current P/E ratio of 24.6x is notably below its 5-year median of 30.1x, indicating that the stock is trading at a discounted valuation compared to its historical averages. This analysis aligns with the GF Valueâ„¢ assessment of being undervalued, suggesting that ADP may offer a more attractive entry point for those considering investment in the software industry.
What Does ADP's GF Scoreâ„¢ Tell Us?
The GF Score™ is a composite score that evaluates a company’s fundamental strengths, providing insight into its potential for long-term performance. ADP's score of 91/100 indicates a strong position, particularly in profitability and growth, with the following sub-rankings:
| Metric | Rating |
|---|---|
| GF Scoreâ„¢ | 91 |
| Financial Strength | 6/10 |
| Profitability | 9/10 |
| Growth | 10/10 |
| Valuation | 10/10 |
| Momentum | 4/10 |
The strongest areas for ADP lie in its growth and valuation, both rated at 10/10, indicating robust growth potential and attractive valuation metrics. However, the financial strength score of 6/10 and momentum score of 4/10 suggest that while the company is fundamentally sound, there may be some concerns regarding its financial stability and short-term market performance.
What Are Gurus and Insiders Doing with ADP?
Currently, 11 gurus hold shares of ADP, with 8 adding to their positions and 5 trimming their holdings in recent quarters. This indicates a generally positive sentiment among institutional investors, which could be a strong indicator of confidence in the company's future prospects.
In terms of insider activity, the recent transactions reveal that insiders have bought $0.7M worth of shares while selling $0.2M in the last three months. This net buying suggests that insiders believe in the company's potential and are optimistic about its growth trajectory, further enhancing the attractiveness of ADP as a potential investment.
What This Means for Investors
In conclusion, Automatic Data Processing Inc ADP appears to be undervalued based on the GF Valueâ„¢ estimate, which reflects a potential investment opportunity. The positive signals from guru activity and insider buying further reinforce this assessment, making it an appealing option for those seeking a dividend stock with growth potential. For more detailed data, visit the Automatic Data Processing Inc (ADP) stock page, and explore additional insights on the GF Valueâ„¢ page.
Frequently Asked Questions
What is ADP's GF Scoreâ„¢?
ADP's GF Scoreâ„¢ is 91/100, indicating a strong overall performance relative to the market, suggesting robust fundamentals.
Is ADP overvalued or undervalued?
ADP is currently undervalued as per the GF Valueâ„¢ verdict, with a 13.6% margin below the estimated fair value.
What is ADP's P/E ratio?
ADP's P/E (TTM) is 24.6x, which is 18% below its 5-year median of 30.1x, indicating a discounted valuation.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
