Automatic Data Processing, Inc. provides cloud-based human capital management (HCM) solutions worldwide. It operates in two segments, Employer Services and Professional Employer Organization (PEO).
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS. Shaded region = analyst consensus for the current and next fiscal year (18 analysts).
| Parameter | BaseValue |
|---|---|
Initial Cash Flow | |
| Growth Rate (Yr 1-5) | % |
| Growth Rate (Yr 6-10) | % |
| Terminal Growth Rate | % |
| Discount Rate | % |
Base Case $259.74 Implied EV: $104.80B |
What growth rate is the market pricing in at $294?
The market implies +11.7% Owner Earnings growth, roughly in line with history — reasonably priced.
Standard FCF implies +6.5%, reflecting ongoing growth investment.
Wide moat with strength across all dimensions. Revenue Predictability is the standout factor.
"Market is optimistic — be cautious and ensure you have a margin of safety"
Near fair value but market is greedy — optimism is already priced in
