Automatic Data ProcessingXTER:ADP -0.15%88 Pretax Margin % is 30.00% as of Mar. 2026, which is 36% above its 10-year median of 22.11. GuruFocus rates XTER:ADP with a GF Score™ of 88/100 and a GF Value™ of €265.32 (Modestly Undervalued). The stock has 2 warning signs investors should review. Among 2,821 Software companies, Automatic Data Processing ranks better than 91.53% on this metric.
The historical rank and industry rank for Automatic Data Processing's Pretax Margin % or its related term are showing as below:
XTER:ADP'
s Pretax Margin % Range Over the Past 10 Years
Min: 17.2 Med: 22.11 Max: 26.22
Current: 26.22
XTER:ADP's Pretax Margin % is ranked better than 91.53% of 2821
companies
in the Software industry
Industry Median: 3.5
vs XTER:ADP: 26.22
Automatic Data Processing (XTER:ADP) Pretax Margin % Explanation
The pretax margin, as know as pretax profit margin, is widely used to measure the operating efficiency of a company before deducting taxes.
The pretax margin is sometimes preferred over the net margin as tax expenditures can make profitability comparisons between companies misleading.
It is a useful tool to compare companies operating in the same sector and less effective when comparing companies from other sectors as each industry generally has different operating expenses and sales patterns.
The long term trend of the pretax margin is a good indicator of the competitiveness and health of the business.
Automatic Data Processing Pretax Margin % Related Terms
Automatic Data Processing Pretax Margin % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
XTER:ADP vs SNOW, DDOG, ADBE: Pretax Margin % Comparison
For the Software - Application subindustry, Automatic Data Processing's Pretax Margin %, along with its competitors' market caps and Pretax Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Automatic Data Processing Pretax Margin % vs Software Industry
For the Software industry and Technology sector, Automatic Data Processing's Pretax Margin % distribution charts can be found below:
* The bar in red indicates where Automatic Data Processing's Pretax Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Automatic Data Processing (XTER:ADP) has a Pretax Margin % of 30.00% as of Mar. 2026. Pre-Tax margin is the ratio of total pre-tax income to net sales. View historical data on Automatic Data Processing and its competitors. This is 36% above median its historical median of 22.11. Over the past decade, Automatic Data Processing's Pretax Margin % has ranged from 17.20 to 26.22. According to the industry distribution chart, Automatic Data Processing ranks #239 out of 2821 companies in the Software industry, placing it in the top 8.5%.
Is Automatic Data Processing's Pretax Margin % too high?
Automatic Data Processing's current Pretax Margin % of 30.00% is 36% above median its 10-year median of 22.11. Over the past 10 years, this metric has ranged from a low of 17.20 to a high of 26.22. The Software industry median Pretax Margin % is 3.50. Automatic Data Processing's value of 30.00% is 757.1% above this industry median. Based on the distribution chart, Automatic Data Processing ranks #239 out of 2821 companies in the Software industry, which is in the top quartile — a strong position relative to peers. Overall, Automatic Data Processing has a GF Score™ of 88/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Automatic Data Processing's Pretax Margin % compare to SNOW and DDOG?
According to the Software industry distribution chart, Automatic Data Processing ranks #239 out of 2821 companies for Pretax Margin %. This places Automatic Data Processing in the top 9% of its industry — outperforming the majority of peers. The industry median Pretax Margin % is 3.50. Automatic Data Processing's value of 30.00% is 757.1% above this benchmark. Historically, Automatic Data Processing's own Pretax Margin % has ranged from 17.20 to 26.22 over the past decade. While the company's 10-year median is 22.11 vs. the industry median of 3.50, Automatic Data Processing has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Pretax Margin % for a Software company?
The median Pretax Margin % among Software companies is 3.50, based on 2,821 companies in the industry. Companies in the top quartile (top 25%) have a Pretax Margin % significantly above this median, while those in the bottom quartile fall well below. However, Pretax Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Automatic Data Processing's current Pretax Margin % of 30.00% is 757.1% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Pretax Margin % mean?
A high Pretax Margin % can signal that a stock is expensive relative to its fundamentals. Pre-Tax margin is the ratio of total pre-tax income to net sales. View historical data on Automatic Data Processing and its competitors. For the Software industry, the median Pretax Margin % is 3.50 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Automatic Data Processing's current Pretax Margin % is 30.00%, which is 36% above median its own 10-year median of 22.11. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Automatic Data Processing stock overvalued right now?
Based on GuruFocus' analysis, Automatic Data Processing (XTER:ADP) is currently considered Modestly Undervalued. The stock's GF Value™ is €265.32, compared to a current price of €195.08 — trading 26.5% below its estimated fair value. The current Pretax Margin % is 30.00%, which is 36% above median its 10-year median of 22.11 and 757.1% above the Software industry median of 3.50. Automatic Data Processing's overall GF Score™ is 88/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Pretax Margin % calculated?
Pretax Margin % is calculated from a company's financial statements. For Automatic Data Processing (XTER:ADP), the current Pretax Margin % is 30.00% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Automatic Data Processing (XTER:ADP) Overvalued in 2026?
Based on GuruFocus' analysis, Automatic Data Processing stock appears to be undervalued.
The current stock price of €195.08 is trading 26.5% below its estimated GF Value™ of €265.32.
GuruFocus considers Automatic Data Processing to be Modestly Undervalued.
Key valuation signals for XTER:ADP:
Pretax Margin %: 30.00% (36% above median its 10-year median of 22.11)
GF Value™: €265.32 vs. price of €195.08 (26.5% below fair value)
Industry Position: 757.1% above the Software median (#239 of 2821)
No single metric tells the full story. See the XTER:ADP stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Automatic Data Processing, or ADP, is a global, cloud-based human capital management provider offering payroll, compliance, talent management, benefits administration, and retirement services. The firm also provides HR outsourcing services, including PEO offerings, enabling clients to reduce HR overhead. Its broad suite serves customers of all sizes across diverse sectors, and the firm holds large market shares in its core markets. As of fiscal 2025, ADP counts over 1.1 million clients and manages payroll for more than 42 million workers across 140 countries.
88GF Score
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