Automatic Data Processing (NASDAQ:ADP – Get Free Report) released its quarterly earnings data on Wednesday. The business services provider reported $3.37 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $3.30 by $0.07, Zacks reports. The business had revenue of $5.94 billion during the quarter, compared to analysts’ expectations of $5.85 billion. Automatic Data Processing had a net margin of 19.96% and a return on equity of 68.44%. The firm’s quarterly revenue was up 7.0% compared to the same quarter last year. During the same period in the prior year, the company earned $3.06 EPS. Automatic Data Processing updated its FY 2026 guidance to 11.010-11.110 EPS.
Here are the key takeaways from Automatic Data Processing’s conference call:
- ADP reported a strong Q3 beat with 7% revenue growth, 80 basis points of adjusted EBIT margin expansion and 10% adjusted EPS growth, and raised full?year guidance to 6%–7% revenue growth, 70–80 bps margin expansion, and 10%–11% adjusted EPS growth.
- The company increased its client funds outlook—average client funds balances growth to ~6% and raised the midpoint of client funds interest revenue by $25 million to a $1.34B–$1.35B range—creating a meaningful near?term revenue tailwind.
- ADP is leaning into AI across products and service delivery (ADP Assist, Lyric HCM, Marketplace agents), citing productivity gains such as ~30 minutes saved per payroll agent and ~80% time reductions for common HR actions, with The Zone rollout expected to cover >40% of service staff by year?end.
- PEO revenue rose but PEO margins fell ~120 basis points in Q3 due to zero?margin passthrough growth, higher SUI costs and increased selling expenses, representing a notable near?term margin headwind for that segment.
- Bookings and retention show strengths—record Employer Services retention and client satisfaction and solid bookings (notably in international and compliance)—but ADP kept its ES bookings range wide (4%–7%) and warned Q4 outcomes remain sensitive to pipeline, FX, and end?of?year dynamics.
Automatic Data Processing Trading Up 8.0%
NASDAQ:ADP opened at $215.06 on Thursday. Automatic Data Processing has a 12 month low of $188.16 and a 12 month high of $329.93. The company has a current ratio of 1.03, a quick ratio of 1.03 and a debt-to-equity ratio of 0.62. The stock has a market capitalization of $86.59 billion, a price-to-earnings ratio of 20.68 and a beta of 0.85. The firm has a fifty day simple moving average of $206.75 and a two-hundred day simple moving average of $238.83.
Automatic Data Processing Dividend Announcement
Insider Activity
In other Automatic Data Processing news, VP Brian L. Michaud sold 1,000 shares of the firm’s stock in a transaction that occurred on Friday, February 6th. The stock was sold at an average price of $234.18, for a total value of $234,180.00. Following the completion of the sale, the vice president owned 15,310 shares of the company’s stock, valued at approximately $3,585,295.80. This trade represents a 6.13% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. Also, VP David Foskett sold 266 shares of the company’s stock in a transaction that occurred on Thursday, February 5th. The stock was sold at an average price of $237.00, for a total value of $63,042.00. Following the transaction, the vice president directly owned 10,954 shares in the company, valued at $2,596,098. The trade was a 2.37% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders have sold 1,809 shares of company stock worth $410,410. Company insiders own 0.20% of the company’s stock.
Institutional Trading of Automatic Data Processing
Hedge funds and other institutional investors have recently bought and sold shares of the business. Brighton Jones LLC increased its holdings in Automatic Data Processing by 92.1% during the 4th quarter. Brighton Jones LLC now owns 10,026 shares of the business services provider’s stock worth $2,935,000 after purchasing an additional 4,808 shares in the last quarter. Schnieders Capital Management LLC. increased its position in shares of Automatic Data Processing by 21.8% during the 2nd quarter. Schnieders Capital Management LLC. now owns 1,259 shares of the business services provider’s stock valued at $388,000 after purchasing an additional 225 shares during the last quarter. Bison Wealth LLC increased its holdings in Automatic Data Processing by 22.8% during the fourth quarter. Bison Wealth LLC now owns 3,664 shares of the business services provider’s stock worth $1,073,000 after buying an additional 681 shares during the last quarter. Stonebridge Capital Advisors LLC bought a new stake in shares of Automatic Data Processing in the 2nd quarter worth approximately $203,000. Finally, Loomis Sayles & Co. L P bought a new stake in shares of Automatic Data Processing in the fourth quarter valued at $135,000. Institutional investors own 80.03% of the company’s stock.
Automatic Data Processing declared that its Board of Directors has initiated a stock buyback program on Wednesday, January 14th that authorizes the company to buyback $6.00 billion in outstanding shares. This buyback authorization authorizes the business services provider to purchase up to 5.8% of its shares through open market purchases. Shares buyback programs are typically an indication that the company’s leadership believes its shares are undervalued.
Wall Street Analysts Forecast Growth
Several brokerages have recently issued reports on ADP. Wells Fargo & Company lowered their price target on shares of Automatic Data Processing from $262.00 to $214.00 and set an “underweight” rating for the company in a report on Friday, March 27th. Cantor Fitzgerald reduced their price objective on Automatic Data Processing from $306.00 to $244.00 and set an “overweight” rating on the stock in a research report on Tuesday, April 21st. Guggenheim started coverage on Automatic Data Processing in a report on Thursday, March 19th. They issued a “buy” rating and a $270.00 target price for the company. Stifel Nicolaus dropped their target price on Automatic Data Processing from $280.00 to $270.00 and set a “hold” rating for the company in a research report on Monday, February 9th. Finally, JPMorgan Chase & Co. cut their price target on Automatic Data Processing from $295.00 to $275.00 and set an “underweight” rating on the stock in a research note on Thursday, January 29th. One investment analyst has rated the stock with a Strong Buy rating, two have issued a Buy rating, nine have assigned a Hold rating and two have given a Sell rating to the stock. According to MarketBeat.com, Automatic Data Processing presently has an average rating of “Hold” and a consensus price target of $265.69.
View Our Latest Stock Analysis on Automatic Data Processing
Key Headlines Impacting Automatic Data Processing
Here are the key news stories impacting Automatic Data Processing this week:
- Positive Sentiment: ADP beat Q3 estimates — reported $3.37 EPS vs. consensus ~ $3.30 and revenue of $5.94B (up 7% YoY). Management raised FY?2026 EPS guidance to $11.010–11.110 and revenue to roughly $21.8–22.0B, signaling stronger execution and recurring revenue strength. ADP Reports Third Quarter Fiscal 2026 Results
- Positive Sentiment: Management emphasized AI adoption on the earnings call as a growth catalyst — noting AI-driven features are accelerating product demand and efficiency, which underpinned the raised guidance. This message supports a structural growth narrative beyond the quarter. ADP Earnings Call: AI Gains, Guidance Raised
- Positive Sentiment: Company slide deck and earnings presentation provide details on revenue mix, client funds income growth, and segment execution that support the beat and outlook. Helpful for investors modeling FY26 cadence. Automatic Data Processing, Inc. 2026 Q3 – Results – Earnings Call Presentation
- Neutral Sentiment: Analyst/coverage writeups (Zacks, Benzinga) summarize the beat and highlight key metrics (7% revenue growth, higher client funds income) for context; useful but largely reiterative of the release. Compared to Estimates, ADP (ADP) Q3 Earnings: A Look at Key Metrics
- Neutral Sentiment: ADP’s National Employment Report and related data releases keep the company visible as a provider of labor market intelligence, supporting product relevance but not directly tied to near?term stock moves. ADP National Employment Report Preliminary Estimate for April 28, 2026
- Negative Sentiment: Morgan Stanley cut its price target from $311 to $274 and moved to Equal Weight — a signal that some analysts see less near?term upside despite the beat, which can cap gains. Morgan Stanley Adjusts Price Target on Automatic Data Processing to $274 from $311
- Negative Sentiment: Cantor Fitzgerald lowered its price target (from $306 to $244) even while keeping an Overweight rating, reflecting concerns that macro or multiple?compression risks could be understated — another potential headwind for share momentum. Cantor Fitzgerald Says Macro Risks May Be Overstated for Automatic Data Processing (ADP)
Automatic Data Processing Company Profile
Automatic Data Processing, Inc (ADP) is a global provider of cloud-based human capital management (HCM) and payroll solutions. Founded in 1949 and headquartered in Roseland, New Jersey, ADP began as a payroll processing company and has evolved into a diversified provider of workforce management, HR, benefits administration, tax and compliance services, and analytics for employers of all sizes.
ADP’s product portfolio includes payroll processing and tax filing, time and attendance systems, benefits administration, talent management, and HR outsourcing.
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