Automatic Data Processing, Inc. (ADP): analysis and signal as of September 4, 2026
In short
The analysis signal is weak on Automatic Data Processing, Inc. (ADP), with a vote of 2/3. The main reason lies in the price extension above its moving averages, 8,7 % above the MM50 and 20,8 % above the MM200, and in the decline in US job postings, which weighs on "pays per pay" volumes.
- Current signal
- weak (vote 2/3)
- Deterministic score
- +0.0 → signal expected by the scale : weak (September 10, 2026)
- Layers
- fundamentals : positive, price : positive, risks : neutral
Triggered rules
| Rule | Weight |
|---|---|
| favors a high and durable return on invested capital (ROIC), a marker of a lasting moat | +2.0 |
| penalizes a PEG above 2, the anticipated growth is overpaid (overvalued fast grower) | -1.5 |
| penalizes direct holding of US securities in a CTO (US estate tax at death), favors a UCITS ETF domiciled in IE | -1.0 |
| moderately favors an asset with robust operating profitability (RMW factor), cross-check with accounting quality (possible manipulation) | +0.5 |
Thesis
ADP combines a wide competitive advantage, based on switching costs and US regulatory complexity, a high ROIC, a net cash balance sheet and more than forty years of dividend increases. The trajectory is nonetheless stretched 8,7 % above the 50-session moving average and 20,8 % above the 200-session moving average, and the decline in US job postings is hitting "pays per pay" volumes. The quality of the company is not in question, but this combination of technical extension and US employment decline explains a weak signal.
Bull case
The bullish argument rests on measurable defensive quality: an operating margin of about 31 %, free cash flow of 4,5 to 5 Md USD per year, share repurchases of 5 to 6 Md USD annualized, a net cash balance sheet and stable accruals with no Beneish signal. Exposure to penalized sectors (export, auto, discretionary, rate-sensitive) is close to zero. These characteristics outline a profitability and financial strength profile consistent with the selected quality criteria.
Bear case
The bearish argument combines three headwinds. The contraction in US employment is attacking "pays per pay" volumes. The technical extension, after a rise achieved almost entirely during the session, exposes the stock to a pullback. Finally, a functional overlap with V and MA concentrates exposure on US payment processing without any correlation measure. There are also a price and a PER not confirmed during the session, as well as the threat of disruption by artificial intelligence to the human resources business (Workday, SAP).
Scenarios
Bullish scenario, weighted at 30 %: stabilization of US employment and FY27 organic growth above 6 %, with a gain of 12 to 15 % over twelve months including dividends. Central scenario, weighted at 50 %: consolidation toward the MM50 then a resumption, for a performance of 5 to 8 % per year. Bearish scenario, weighted at 20 %: confirmed employment reversal and multiple compression, with a loss of 15 to 20 % toward the MM200 zone.
Risks
A close below the 200-session moving average would invalidate the thesis, as would organic growth guidance below +3 %. The functional overlap with V and MA also constitutes a concentration risk on US payment processing, with no correlation measure available. ATTENTION: the spot price of 04/09/2026 is not confirmed, the sources cite contradictory references (121,77 USD versus 283,53 USD, probably an effect of the 2:1 split of March 2025), the references are therefore expressed relative to the moving averages.
Market positioning (short sellers)
- Short interest / shares outstanding
- 2.72 %
- Days to cover
- 5.14
- Settlement date
- 2026-08-31
- Source
- FINRA (disseminated on 2026-09-12)
Signal history (last 12 months)
| Date | Signal | New fact |
|---|---|---|
| weak (2/3) | No prior verdict for this security and no new numerical data after the readings of 03 and 04 September 2026. |
Frequently asked questions
Why is the signal weak despite the quality of the company?
The quality is established: a competitive advantage through switching costs, a high ROIC, a net cash balance sheet and more than forty years of dividend increases. But the price is stretched 8,7 % above the 50-session moving average and 20,8 % above the 200-session moving average, while the decline in US job postings weighs on "pays per pay" volumes. The vote comes out at 2/3.
What are ADP's financial strengths?
The operating margin reaches about 31 %. Free cash flow stands between 4,5 and 5 Md USD per year, and share repurchases amount to 5 to 6 Md USD annualized. The balance sheet is net cash, accruals remain stable with no Beneish signal, and exposure to penalized sectors (export, auto, discretionary, rate-sensitive) is close to zero.
What would invalidate the thesis?
A close below the 200-session moving average would invalidate the thesis. Organic growth guidance below +3 % would constitute the second invalidation criterion. The scenarios also show that a confirmed reversal in US employment, combined with multiple compression, would correspond to the bearish case, weighted at 20 %, with a potential loss of 15 to 20 % toward the 200-session moving average zone.
Does artificial intelligence represent a threat to ADP's business?
Yes, disruption by artificial intelligence appears among the bearish arguments on the human resources business. Workday and SAP are cited as potential competitors. This risk compounds the contraction in US employment and the technical extension of the price, which together with it form a triple headwind on the stock.
Why do the price references diverge?
The spot price of 04/09/2026 is not confirmed. The sources cite contradictory references, 121,77 USD versus 283,53 USD, probably an effect of the 2:1 split of March 2025. The analysis references are therefore expressed relative to the moving averages rather than as absolute levels, which explains the wording of the invalidation criteria.
Sources
The official filings below are the issuer's own, matched to this stock by its identifier (LEI, CIK or ISIN). The figures quoted above come from an automated arbitration: they have not been re-checked one by one.
- — 10-K (SEC · 10-K)
- — 2.02 Results of Operations and Financial Condition; 9.01 Financial Statements and Exhibits (SEC · 8-K)
- — 10-Q (SEC · 10-Q)
Automated AI analysis: limitations and transparency
- This content is an automated analysis produced using artificial intelligence. Personal analysis for information purposes — no personalised investment advice. MMR content consists of general research. It does not take account of your financial circumstances, objectives or risk tolerance. Data, analyses and results, including those produced using artificial intelligence, may contain errors, be incomplete or become outdated. No return or outcome is guaranteed. All investments carry a risk of partial or total loss of capital. Past performance and simulations do not predict future results. Before making any decision, check information against original sources and, where necessary, consult an authorised professional. You remain responsible for your investment decisions. This notice does not exclude or limit any liability that cannot legally be excluded or limited.
- Tool and analysis: QDNA, Aurélien Ambert.
- Analysis (arbitration) completed on September 4, 2026; this page was completed on September 4, 2026 at 05:11 (UTC).
- Interests: no position in the stock analysed (ADP) is recorded in the data consulted on (UTC). This does not confirm the absence of holdings or other interests. The situation at the analysis publication date has not been reconstructed.
- This declaration covers only recorded positions in this stock; it is not an exhaustive verification of other interests or remuneration.
- Methodology: analysis chain, score formula and scale described on the public methodology page.
- Analysis horizon: 2035.
See also
- Neighbouring stock in the same sector: Apple Inc. (AAPL)
- All analysed stocks
- Public methodology