ADP Investors Weigh Valuation Ahead of October Results

Automatic Data Processing is due to report first-quarter fiscal 2027 results before the Nasdaq opens on October 28. The upcoming report and management’s comments on the call are drawing attention to the company’s valuation.

ADP shares were at $259.83, down 0.75% from the previous close, as of 17:46 UTC on September 29. The last close cited by Simply Wall St was $261.80.

Simply Wall St’s most popular valuation narrative puts fair value at $287.60 and describes the shares as 9% undervalued. The article also noted that ADP traded at 23.5 times earnings, compared with 19.2 times for peers and 21 times for the US Professional Services average.

The publication said investments in AI-driven automation across ADP Assist, Lyric and the Zone are supporting improved service productivity. It reported that management targets annual adjusted operating margin expansion of 70 to 90 basis points.

The article also flagged risks to that outlook, including continued pressure on professional employer organization margins and AI-driven payroll competitors that could weaken pricing power.