CluenexAutomatic Data Processing Inc ADP
Automatic Data Processing Inc scores good on business quality (6.6 of 10). Here is why, in plain words, and what our sealed record shows.
Why it matters
- What Automatic Data Processing Inc does
Automatic Data Processing provides cloud-based human capital management solutions, processing payroll and managing human resources for businesses of all sizes who pay subscription and transaction fees.
- What it does best
ADP embeds itself deeply into employer payroll workflows, creating high switching costs. Its operating margin sits in the top decile of its sector at 26.3%, outpacing RHI's 0.2%.
- The main risk
A cooling labor market threatens transaction volumes, as evidenced by recent employer caution and slowing job gains that directly pressure its core payroll revenue base.
Quality, check by check
Scored against its own industry, from company filings.
Operating margin hits 26.3% while FCF margin reaches 21.8%, driven by high-margin software subscriptions. Scale improves unit profitability as fixed platform costs get distributed over more users.
Switching costs lock in enterprise and small business clients who rely on ADP for tax compliance. Its gross margin ranks in the top quartile of its sector at 46.5%, though peers like PAYX reach 91.3%.
Revenue grew at 6.7% to reach $21.9 billion, running in the middle of the pack for its sector and maintaining a steady historical pace without sharp acceleration.
Total debt sits at $5.0 billion against $4.2 billion in cash, supported by an interest coverage ratio of 12.6x making debt servicing manageable. Free cash flow reached $4.8B, getting stronger.
Insiders
Executives and directors, from SEC Form 4 filings we read ourselves. Open market trades only; grants, option exercises and pre-planned sales left out.
No open market buys or unplanned sales by executives or directors.
Our sealed record on ADP
Verdicts appear here 30 days after we publish them; members see today's. Each one is in the nightly ledger, fingerprinted the night it was made.
The first sealed verdicts appear here on Oct 11, 2026.
Questions
Automatic Data Processing Inc scores good on the Cluenex quality check (6.6 of 10), measured against its own industry. Profitability is strong, moat fair, growth steady and financial health fair.
In the last 90 days of SEC Form 4 filings: No open market buys or unplanned sales by executives or directors.
Oct 28, 2026.
See ADP today
- Today's verdict on ADP, and why
- Fair value with cautious, base and optimistic cases
- The exact price that would change the verdict
- Which stocks each signal names, the night it fires
Cite this page: Cluenex, “Automatic Data Processing Inc (ADP)”, https://cluenex.com/stocks/adp/, data as of Oct 10, 2026.