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 managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. 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||1765287.0||2067607.0|
BUY. The current P/E ratio indicates a discount compared to an average of 31.23 for the IT Services industry and a premium compared to the S&P 500 average of 24.92. For additional comparison, its price-to-book ratio of 12.12 indicates a significant premium versus the S&P 500 average of 2.99 and a significant premium versus the industry average of 10.11. 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 27.62||Peers 31.23||ADP 21.11||Peers 21.20|
Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.
ADP is trading at a discount to 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 25.44||Peers 21.41||ADP 2.19||Peers 1.27|
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.
Premium. 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 premium to its peers.
|ADP 12.12||Peers 10.11||ADP 22.29||Peers -4.67|
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 3.84||Peers 5.47||ADP 7.21||Peers 13.32|
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