Latest Ratios: P/E Ratio 24.6x · EV/EBITDA 17.7x · ROE 76.0%. (1996–2025 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $98.9B | $126.0B | $98.4B | $91.4B | $88.4B | $85.0B | $64.4B | $72.3B | $59.5B | $46.1B | $42.2B |
| Enterprise Value | $104.6B | $131.8B | $99.2B | $92.7B | $90.5B | $85.8B | $64.9B | $72.7B | $59.3B | $45.4B | $41.0B |
| P/E Ratio → | 24.61 | 30.90 | 26.23 | 26.77 | 30.01 | 32.72 | 26.12 | 31.55 | 31.56 | 26.61 | 28.28 |
| P/S Ratio | 4.81 | 6.13 | 5.12 | 5.07 | 5.36 | 5.67 | 4.42 | 5.10 | 4.46 | 3.73 | 3.61 |
| P/B Ratio | 16.22 | 20.37 | 21.64 | 26.04 | 27.42 | 15.00 | 11.20 | 13.40 | 12.56 | 11.60 | 9.41 |
| P/FCF | 20.73 | 26.42 | 27.37 | 25.13 | 34.74 | 32.86 | 26.73 | 34.10 | 29.09 | 27.87 | 28.62 |
| P/OCF | 20.02 | 25.52 | 23.66 | 21.71 | 28.54 | 27.49 | 21.29 | 26.91 | 23.64 | 21.70 | 22.68 |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 6.41 | 5.16 | 5.15 | 5.49 | 5.72 | 4.45 | 5.13 | 4.45 | 3.66 | 3.51 |
| EV / EBITDA | 17.74 | 22.34 | 18.02 | 18.34 | 20.96 | 22.37 | 17.91 | 21.29 | 20.06 | 16.59 | 16.16 |
| EV / EBIT | 19.33 | 22.89 | 18.93 | 19.75 | 23.26 | 25.08 | 19.72 | 23.17 | 24.86 | 17.37 | 17.89 |
| EV / FCF | — | 27.62 | 27.59 | 25.50 | 35.55 | 33.16 | 26.92 | 34.25 | 29.00 | 27.40 | 27.81 |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 50.8% | 50.8% | 49.9% | 48.9% | 46.9% | 46.5% | 46.0% | 46.7% | 45.4% | 45.6% | 45.9% |
| Operating Margin | 26.3% | 26.3% | 25.7% | 25.0% | 23.1% | 22.2% | 21.5% | 21.2% | 19.3% | 19.5% | 19.3% |
| Net Profit Margin | 19.8% | 19.8% | 19.5% | 18.9% | 17.9% | 17.3% | 16.9% | 16.2% | 12.2% | 14.0% | 12.8% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 76.0% | 76.0% | 93.1% | 101.3% | 66.3% | 45.5% | 44.2% | 45.2% | 37.2% | 41.0% | 32.1% |
| ROA | 7.6% | 7.6% | 7.1% | 6.0% | 5.3% | 5.9% | 6.1% | 5.7% | 4.3% | 4.3% | 3.9% |
| ROIC | 47.1% | 47.1% | 72.6% | 66.6% | 48.6% | 39.5% | 39.6% | 43.8% | 49.8% | 55.8% | 52.1% |
| ROCE | 50.6% | 50.6% | 56.5% | 55.9% | 40.9% | 33.7% | 34.3% | 34.0% | 32.6% | 31.8% | 32.5% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 1.46 | 1.46 | 0.81 | 0.98 | 1.08 | 0.59 | 0.41 | 0.42 | 0.42 | 0.50 | 0.45 |
| Debt / EBITDA | 1.54 | 1.54 | 0.67 | 0.68 | 0.81 | 0.87 | 0.65 | 0.66 | 0.68 | 0.73 | 0.79 |
| Net Debt / Equity | — | 0.92 | 0.17 | 0.39 | 0.64 | 0.14 | 0.08 | 0.06 | -0.04 | -0.20 | -0.26 |
| Net Debt / EBITDA | 0.97 | 0.97 | 0.14 | 0.27 | 0.48 | 0.20 | 0.12 | 0.09 | -0.06 | -0.28 | -0.47 |
| Debt / FCF | — | 1.20 | 0.22 | 0.37 | 0.81 | 0.30 | 0.18 | 0.15 | -0.08 | -0.47 | -0.80 |
| Interest Coverage | 12.63 | 12.63 | 14.32 | 18.22 | 45.08 | 57.30 | 30.72 | 24.14 | 23.23 | 32.64 | 40.76 |
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 1.05 | 1.05 | 1.01 | 0.99 | 0.99 | 1.07 | 1.05 | 1.05 | 1.05 | 1.10 | 1.10 |
| Quick Ratio | 1.05 | 1.05 | 1.01 | 0.99 | 0.99 | 1.07 | 1.05 | 1.05 | 1.05 | 1.10 | 1.10 |
| Cash Ratio | 0.19 | 0.19 | 0.07 | 0.05 | 0.03 | 0.07 | 0.06 | 0.06 | 0.07 | 0.09 | 0.09 |
| Asset Turnover | — | 0.39 | 0.35 | 0.35 | 0.26 | 0.31 | 0.37 | 0.34 | 0.34 | 0.33 | 0.27 |
| Inventory Turnover | — | — | — | — | — | — | — | — | — | — | — |
| Days Sales Outstanding | — | 63.54 | 65.16 | 60.99 | 70.14 | 66.34 | 61.08 | 62.81 | 54.34 | 50.23 | 54.52 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | 2.4% | 1.9% | 2.2% | 2.1% | 1.9% | 1.9% | 2.3% | 1.8% | 1.8% | 2.2% | 2.2% |
| Payout Ratio | 58.8% | 58.8% | 58.2% | 55.8% | 56.3% | 60.6% | 59.6% | 56.4% | 65.6% | 57.4% | 63.2% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 4.1% | 3.2% | 3.8% | 3.7% | 3.3% | 3.1% | 3.8% | 3.2% | 3.2% | 3.8% | 3.5% |
| FCF Yield | 4.8% | 3.8% | 3.7% | 4.0% | 2.9% | 3.0% | 3.7% | 2.9% | 3.4% | 3.6% | 3.5% |
| Buyback Yield | 1.3% | 1.0% | 1.3% | 1.2% | 2.2% | 1.6% | 1.6% | 1.3% | 1.7% | 2.7% | 2.7% |
| Total Shareholder Yield | 3.7% | 2.9% | 3.5% | 3.3% | 4.1% | 3.5% | 3.8% | 3.1% | 3.5% | 4.9% | 5.0% |
| Shares Outstanding | — | $409M | $412M | $416M | $421M | $428M | $433M | $438M | $443M | $450M | $459M |
Legacy platform migration friction
According to current market data, ADP trades at a P/E of 22.40, which suggests investors are pricing the firm as a defensive, yield-generating asset rather than a high-growth technology player, especially when compared to the higher multiples commanded by cloud-native HCM challengers like Paylocity.
The forward P/E of 20.19 implies that the market anticipates stable, albeit moderate, earnings growth, likely discounting the potential for significant multiple expansion. Investors should monitor whether the current valuation adequately compensates for the risks associated with legacy platform migration and the potential for margin compression in the PEO segment.
Based on reported figures, ADP's ROIC has exhibited significant volatility, swinging from a negative 0.7% in 2026Q1 to 17.1% in 2026Q3, which indicates that the company's ability to compound returns on invested capital is currently sensitive to operational shifts and strategic investment cycles.
This inconsistency suggests that the underlying drivers of capital efficiency—specifically the integration of new software platforms—are not yet yielding the stable, high-margin returns seen in pure-play software peers. Analysts should investigate whether these fluctuations are temporary artifacts of the 'Next Gen' rollout or indicative of a structural decay in the efficiency of capital deployment.
As reported in recent financial statements, ADP's asset turnover remains low at approximately 0.08 to 0.10, a figure that is structurally inherent to the business model due to the massive, low-velocity client fund balances held for disbursement rather than traditional operational assets.
The DSO trend, which has fluctuated between 53 and 64 days, suggests that the company maintains a consistent, if not particularly aggressive, collection cycle. Investors should note that these efficiency metrics are heavily influenced by the PEO segment's pass-through nature, which can obscure the underlying velocity of the core software and service business.
Based on the provided balance sheet data, ADP maintains a conservative debt-to-equity ratio that has fluctuated between 0.63 and 1.62, reflecting the strategic use of short-term debt to manage the liquidity requirements associated with its massive client fund investment portfolio.
The interest coverage ratio, which has seen peaks above 26x, suggests that debt service remains highly comfortable, providing the company with significant financial flexibility. This conservative posture appears appropriate given the inherent volatility of client fund management and the need to maintain a fortress-like balance sheet to support its 'Dividend Aristocrat' status.
The most commonly misapplied metric for ADP is the traditional P/S ratio, which fails to account for the significant pass-through revenue generated by the PEO segment that does not contribute to core operating margins or long-term shareholder value creation.
Analysts should instead focus on 'operating revenue' and 'interest on client funds' to better gauge the true earning power of the business. Relying on headline P/S ratios obscures the structural differences between the high-margin software business and the lower-margin, volume-driven PEO model, potentially leading to an inaccurate assessment of the company's valuation.
Includes 30+ ratios · 30 years · Updated daily
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Quick answers to the most common questions about buying ADP stock.
Automatic Data Processing, Inc.'s current P/E ratio is 24.6x. The historical average is 24.5x. This places it at the 43th percentile of its historical range.
Automatic Data Processing, Inc.'s current EV/EBITDA is 17.7x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 14.3x.
Automatic Data Processing, Inc.'s return on equity (ROE) is 76.0%. This is above the typical threshold of 15-20% considered good for most companies. The historical average is 33.8%.
Based on historical data, Automatic Data Processing, Inc. is trading at a P/E of 24.6x. This is at the 43th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Automatic Data Processing, Inc.'s current dividend yield is 2.39% with a payout ratio of 58.8%.
Automatic Data Processing, Inc. has 50.8% gross margin and 26.3% operating margin. Operating margin above 20% indicates strong pricing power and cost efficiency.
Automatic Data Processing, Inc.'s Debt/EBITDA ratio is 1.5x, indicating moderate leverage. A ratio below 2x is generally considered financially healthy.