Automatic Data Processing Inc

Find Ratings Reports
ADP : NASDAQ : Technology
$104.8 up 0.66 | 0.63%
Today's Range: 104.0901 - 104.885
Avg. Daily Volume: 1766300.0
04/25/17 - 10:40 AM ET

Financial Analysis


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.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. To learn more visit www.TheStreetRatings.com.



Income Statement Q2 FY17 Q2 FY16
Net Sales ($mil)2987.32807.0
EBITDA ($mil)658.1570.0
EBIT ($mil)579.7497.4
Net Income ($mil)510.9341.4


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)2746.22821.8
Total Assets ($mil)39999.439899.5
Total Debt ($mil)2010.31997.6
Equity ($mil)3815.14206.2


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin43.4442.65
EBITDA Margin22.0220.3
Operating Margin19.4117.72
Sales Turnover0.30.28
Return on Assets4.233.76
Return on Equity44.433.9
Debt Q2 FY17 Q2 FY16
Current Ratio1.091.1
Debt/Capital0.350.32
Interest Expense20.516.9
Interest Coverage28.2829.43


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)448.9458.7
Div / share0.570.53
EPS1.130.74
Book value / share8.59.17
Institutional Own % n/a n/a
Avg Daily Volume1765287.02067607.0

Valuation


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.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
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.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
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.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
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.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
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

 

 

Latest Stock Upgrades/Downgrades