What changed
$ADP — BUY 📊
Automatic Data Processing, Inc. provides cloud-based human capital management (HCM) solutions worldwide.
🎯 Q1 FY26 | Rev $6B | EPS $3.37 vs $3.30 🟢
💡 Consensus expects low-single-digit revenue growth and flat margins due to macro headwinds, but ADP's 7% revenue growth and 22.9% net margin demonstrate resilience and operating leverage. Market underappreciates the quality of earnings and free cash flow generation that supports a higher multiple.
📉 Reward/Risk: 1.94:1
🏢 Business Quality: 9/10 - Dominant market position in payroll/HR with high switching costs, 90%+ recurring revenue, and robust cash generation.
📊 Valuation: cheap - relative to own history (P/E TTM ~18 vs 10-yr avg 22; EV/EBITDA 10.3 vs 12-15) and peers (Paychex at 20x P/E).
🔮 Catalyst: Upcoming Q4 fiscal 2026 earnings report and guidance update
📊 Our read: BUY. Full analysis →
https://stockduty.xyz/s/ADP0612
Also in play: $PAYX $CTSH $FIS $JKHY $WDAY $MSFT