Automatic Data Processing IncFind Ratings Reports
AUTOMATIC DATA PROCESSING's gross profit margin for the second quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. AUTOMATIC DATA PROCESSING has very weak liquidity. Currently, the Quick Ratio is 0.14 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.
During the same period, stockholders' equity ("net worth") has decreased by 9.29% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.
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|Income Statement||Q2 FY17||Q2 FY16|
|Net Sales ($mil)||2987.3||2807.0|
|Net Income ($mil)||510.9||341.4|
|Balance Sheet||Q2 FY17||Q2 FY16|
|Cash & Equiv. ($mil)||2746.2||2821.8|
|Total Assets ($mil)||39999.4||39899.5|
|Total Debt ($mil)||2010.3||1997.6|
|Profitability||Q2 FY17||Q2 FY16|
|Gross Profit Margin||43.44||42.65|
|Return on Assets||4.23||3.76|
|Return on Equity||44.4||33.9|
|Debt||Q2 FY17||Q2 FY16|
|Share Data||Q2 FY17||Q2 FY16|
|Shares outstanding (mil)||448.9||458.7|
|Div / share||0.57||0.53|
|Book value / share||8.5||9.17|
|Institutional Own %||n/a||n/a|
|Avg Daily Volume||2066990.0||1725302.0|
BUY. AUTOMATIC DATA PROCESSING's P/E ratio indicates a discount compared to an average of 28.19 for the IT Services industry and a value on par with the S&P 500 average of 26.35. For additional comparison, its price-to-book ratio of 11.75 indicates a significant premium versus the S&P 500 average of 2.94 and a significant premium versus the industry average of 9.67. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. The valuation analysis reveals that, AUTOMATIC DATA PROCESSING seems to be trading at a discount to investment alternatives within the industry.
|ADP 26.78||Peers 28.19||ADP 20.46||Peers 19.60|
Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.
ADP is trading at a valuation on par with its peers.
Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.
ADP is trading at a valuation on par to its peers.
|ADP 24.66||Peers 21.10||ADP 2.12||Peers 3.03|
Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.
ADP is trading at a significant premium to its peers.
Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.
ADP trades at a significant discount to its peers.
|ADP 11.75||Peers 9.67||ADP 22.29||Peers 5.77|
Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.
ADP is trading at a premium to its peers.
Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.
ADP is expected to have an earnings growth rate that significantly exceeds its peers.
|ADP 3.72||Peers 5.36||ADP 7.21||Peers 13.00|
Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.
ADP is trading at a significant discount to its industry on this measurement.
Lower. A sales growth rate that trails the industry implies that a company is losing market share.
ADP significantly trails its peers on the basis of sales growth